ILLUSIONS IN THE MARGINAL INVESTMENT SUBSIDY

1962 ◽  
Vol 15 (1) ◽  
pp. 26-31
Author(s):  
WILLIAM H. WHITE
Keyword(s):  
Investment Subsidy

Efficient use of subsidies in the financing of water and wastewater investments

2005 ◽  
Vol 5 (6) ◽  
pp. 197-207
Author(s):  
A.J. Almagro
Keyword(s):  
European Commission ◽  
Significant Risk ◽  
The European Union ◽  
Checks And Balances ◽  
Economic Agents ◽  
Economic Justification ◽  
Economic Rationale ◽  
Eu Directives ◽  
Water And Wastewater ◽  
Investment Subsidy

Compliance with the European Union (EU) standards in the provision of water supply and wastewater services, as set forth in the relevant EU Directives, may require a significant investment effort for some countries and more specifically the new Member States. In order to ease this effort, these countries have the possibility of receiving subsidies from the European Commission to finance their investments. Using as a reference the standard methodology applied by the European Commission to define its intervention rate in a project, this paper focuses on the economic rationale and risks behind the investment subsidies in the sector. The questions asked are (a) what is the economic justification of this kind of investment subsidy and who are the target beneficiaries; (b) what factors may cause these subsidies to reach other economic agents; and (c) what measures would prevent those unexpected transfers of taxpayer resources. The results of the analysis indicate that, although the underlying methodology is economically sound, there is a significant risk that part of the subsidies may end up benefiting economic agents other than those originally targeted. However, this risk can be easily mitigated with some basic checks and balances during the calculation of the intervention rate. The views expressed in this paper are strictly personal.

scholarly journals REVENUE RECYCLING AND COST EFFECTIVE GHG ABATEMENT: AN EXPLORATORY ANALYSIS USING A GLOBAL MULTI-SECTOR MULTI-REGION CGE MODEL

2018 ◽  
Vol 09 (01) ◽  
pp. 1840009 ◽  
Author(s):  
YUNFA ZHU ◽  
MADANMOHAN GHOSH ◽  
DEMING LUO ◽  
NICK MACALUSO ◽  
JACOB RATTRAY
Keyword(s):  
Computable General Equilibrium ◽  
Income Tax ◽  
Capital Investment ◽  
Economic Cost ◽  
Cost Effective ◽  
Cge Model ◽  
Revenue Recycling ◽  
Lump Sum ◽  
Tax Reduction ◽  
Investment Subsidy

Carbon pricing generates revenues which can be recycled back into the economy in different ways to help mitigate the economic cost of abatement. These include, lump-sum transfers to households; reducing existing distortionary taxes, such as income taxes on labor and capital; investment in technology funds leading to energy/emissions efficiency improvements; and/or infrastructure developments that help expedite the adoption of low or lower carbon-intensive technologies. In this paper, we undertake illustrative simulations to explore how different revenue recycling options influence the overall economic outcome in terms of broad macroeconomic indicators, such as Gross Domestic Product (GDP) or household welfare. Environment and Climate Change Canada’s (ECCC) multi-sector, multi-region Computable General Equilibrium (CGE) model (EC-MSMR) is used to simulate various revenue recycling options. These simulations are undertaken for the U.S. economy. The main findings of the paper are: (i) using carbon revenue for a general income tax reduction or investment subsidy is more advantageous than a lump-sum transfer to U.S. consumers in terms of welfare or GDP; and (ii) using carbon revenue for a sector-based subsidy such as renewable energy is more disadvantageous than a lump-sum transfer to consumers. In terms of accumulated welfare effects, our results indicate that the best carbon revenue recycling option is the investment subsidy or capital income tax reduction in the longer horizon; labor tax reductions yield the best outcome in the shorter horizons.

Economic and Environmental Assessments of Two Installation Types of Photovoltaic Systems in Shanghai

2014 ◽  
Vol 672-674 ◽  
pp. 44-47
Author(s):  
Xin Fang Wu ◽  
Yong Sheng Liu ◽  
Juan Xu ◽  
Xiao Dong Si ◽  
Wei Lei ◽  
...  
Keyword(s):  
Net Present Value ◽  
Environmental Benefit ◽  
Pv System ◽  
Pv Systems ◽  
Energy Payback ◽  
Payback Time ◽  
Energy Payback Time ◽  
Negative Impacts ◽  
Investment Subsidy ◽  
Electricity Tariff

This paper mainly analyses a BAPV system of 3kWp and a BIPV system of 10 kWp in Shanghai, China. Net present value (NPV) and the payback time (Pd) as the parameters to determine the profitability of the system based on some actual measured data. As there are two subsidy policies in China, including the initial investment subsidy and PV electricity tariff subsidy. The variations of NPV and Pdwith the initial investment subsidy and PV electricity tariff subsidy are researched. Analysis results indicate both the systems have a good economic benefit. Since the manufacturing, utilization and recycling periods of PV systems can lead to negative impacts on the environment. Environmental impacts by both the systems are also evaluated in this paper by the energy payback time (EPBT) and greenhouse-gas payback time (GPBT). Results show both the systems have a good environmental benefit, PV technology and PV system are sustainable.

scholarly journals Impact of Financing Instruments and Strategies on the Wind Power Production Costs: A Case of Lithuania

2018 ◽  
Vol 55 (2) ◽  
pp. 11-27
Author(s):  
V. Bobinaite ◽  
I. Konstantinaviciute
Keyword(s):  
Venture Capital ◽  
Wind Power ◽  
Electricity Market ◽  
Power Production ◽  
Production Costs ◽  
Selling Price ◽  
Support Measures ◽  
Extended Approach ◽  
Investment Subsidy ◽  
Feed In Tariff

Abstract The paper aims at demonstrating the relevance of financing instruments, their terms and financing strategies in relation to the cost of wind power production and the ability of wind power plant (PP) to participate in the electricity market in Lithuania. The extended approach to the Levelized Cost of Energy (LCOE) is applied. The feature of the extended approach lies in considering the lifetime cost and revenue received from the support measures. The research results have substantiated the relevance of financing instruments, their terms and strategies in relation to their impact on the LCOE and competitiveness of wind PP. It has been found that financing of wind PP through the traditional financing instruments (simple shares and bank loans) makes use of venture capital and bonds coming even in the absence of any support. It has been estimated that strategies consisting of different proportions of hard and soft loans, bonds, own and venture capital result in the average LCOE of 5.1–5.7 EURct/kWh (2000 kW), when the expected electricity selling price is 5.4 EURct/kWh. The financing strategies with higher shares of equity could impact by around 6 % higher LCOE compared to the strategies encompassing higher shares of debt. However, seeking to motivate venture capitalists, bond holders or other new financiers entering the wind power sector, support measures (feed-in tariff or investment subsidy) are relevant in case of 250 kW wind PP. It has been estimated that under the unsupported financing strategies, the average LCOE of 250 kW wind PP will be 7.8–8.8 EURct/kWh, but it will reduce by around 50 % if feed-in tariff or 50 % investment subsidy is applied.

scholarly journals Impacts of Investment Cost, Energy Prices and Carbon Tax on Promoting the Combined Cooling, Heating and Power (CCHP) System of an Amusement Park Resort in Shanghai

Energies ◽  
2020 ◽  
Vol 13 (16) ◽  
pp. 4252
Author(s):  
Liting Zhang ◽  
Weijun Gao ◽  
Yongwen Yang ◽  
Fanyue Qian
Keyword(s):  
Economic Performance ◽  
Carbon Dioxide Emissions ◽  
Carbon Tax ◽  
Energy Prices ◽  
Amusement Park ◽  
Energy Supply System ◽  
Market Competitiveness ◽  
Investment Cost ◽  
Combined Cooling ◽  
Investment Subsidy

Poor economic performance has limited the diffusion of the combined cooling, heating, and power (CCHP) system. Various factors influence the economic performance of the CCHP system. To analyze the impacts of these different factors and promote the CCHP system, this study evaluated its comprehensive performance through a multi-criteria method, using an amusement park resort in Shanghai as a research case. First, three CCHP systems with different penetration rates were presented and simulated in a transient simulation model for comparison. The economic and environmental performance of these different penetration CCHP systems were evaluated based on the dynamic payback period and carbon dioxide emissions. The impacts of investment cost, energy prices, investment subsidy and a carbon tax on the economic performance of the three systems were discussed, and a sensitivity analysis was used to compare these factors. The results show that the current subsidy can reduce the economic gap between the CCHP system and the conventional system, but it still needs to be increased by 1.71 times to achieve market competitiveness of the CCHP system with 100% penetration under the current investment cost and energy prices. In addition, the introduction of a carbon tax could accelerate the promotion of the CCHP system. When the carbon tax reaches 25 $/ton, the CCHP system becomes the best choice of energy supply system.

The effect of leverage on the tax-cut versus investment-subsidy argument

2011 ◽  
Vol 20 (4) ◽  
pp. 123-129 ◽  
Author(s):  
Anna Danielova ◽  
Sudipto Sarkar
Keyword(s):  
Investment Subsidy
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