Taxation of automobile fuels in Brazil: Does ethanol need tax incentives to be competitive and if so, to what extent can they be justified by the balance of GHG emissions?

Renewable Energy

Volumn 37, Issue 1, 2012, Pages 9-18

  Cavalcanti, Marcelo ^a   Szklo, Alexandre ^a   Machado, Giovani ^a   Arouca, Maurício ^a  

^a FEDERAL UNIVERSITY OF RIO DE JANEIRO   (Brazil)

Author keywords

Brazilian ethanol; GHG emissions; Tax policies

Indexed keywords

COST REDUCTION; ETHANOL; ETHANOL FUELS; FOSSIL FUELS; GASOHOL; GASOLINE; GREENHOUSE GASES; PRODUCTIVITY;

ANHYDROUS ETHANOL; EXTERNAL COSTS; GHG EMISSION; GOVERNMENT INCENTIVE; HYDRATED ETHANOL; LIGHT DUTY VEHICLES; PRODUCTIVITY GAIN; TAX POLICIES;

TAXATION;

AUTOMOBILE; COMPETITIVENESS; COST-BENEFIT ANALYSIS; EMISSIONS TRADING; ENVIRONMENTAL ECONOMICS; ETHANOL; FUEL; FUEL CONSUMPTION; GREENHOUSE GAS; SUGAR CANE; TAX INCENTIVE; TAX REFORM;

BRAZIL;

EID: 79961127158     PISSN: 09601481     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.renene.2011.06.005     Document Type: Review

References (79)

1. International fuel prices. Deutsche Gesellschaft Für Technische Zusammenarbeit 2010, GTZ, available at, GTZ, Eschborn, accessed in august 21. http://www.gtz.de/de/dokumente/gtz2009-en-ifp-full-version.pdf, 6th ed.
2. Strand J. Importer and Producer Petroleum Taxation: a Geo-political model 2010, IMF Working Paper, WP/08/35, Fiscal Affairs Department, available at, International Monetary Fund, accessed in July 25. http://www.imf.org/external/pubs/ft/wp/2008/wp0835.pdf.
3. Hotelling H. The economics of Exhaustible resources. J Political Econ 1931, 39:137-175.
4. Dasgupta P., Heal G. Economic Theory and Exhaustible resources 1979, Cambridge University Press, New York.
5. Liquid Biofuels for Transportation in Brazil: potential and implications for sustainable agriculture and energy in the 21st century 2010, GTZ, Available at, accessed in may. http://www.fbds.org.br/4DF01EF4-54FB-484E-BCA7-D26687F08386/FinalDownload/DownloadId-3C70919F547B17BD05101CB86F354EC0/4DF01EF4-54FB-484E-BCA7-D26687F08386/IMG/pdf/doc-116.pdf.
6. Ramsey F. A contribution to the Theory of taxation. Econ J 1927, 37:47-61.
7. Litman T. Appropriate Response to rising fuel prices 2010, available at, Victoria Transport Policy Institute, Canada, accessed in August 11. http://www.vtpi.org/fuelprice.pdf.
8. Storchmann K. The impact of fuel taxes on public transport - an empirical Assessment for Germany. Transp Policy 2001, 8:19-28.
9. Wing-Tat H. Taxation on vehicle fuels: Its impacts on Switching to cleaner fuels. Energy Policy 2004, 34:2566-2571.
10. Greene D., Patterson P., Singh M., Li J. Feebates, Rebates and Gas-guzzler Taxes: a study of incentives for increased fuel economy. Energy Policy 2005, 33:757-775.
11. Klemm A., Parys S. Empirical Evidence on the effects of tax incentives 2009, International Monetary Fund, IMF Working Paper, WP/09/136, Fiscal Affairs Department, July.
12. Pindyck R., Rubinfeld D. Microeconomics 2001, Prentice-Hall, New Jersey. 5th ed.
13. Dresner S., Dunne L., Clinch P., Beuermann C. Social and political responses to ecological tax reform in Europe: an introduction to the special issue. Energy Policy 2006, 34:895-904.
14. Pigou A. The economics of welfare 1918, McMillan, London.
15. Baumol W., Oates W. The Theory of environmental policy 1988, vol 23. Cambridge University Press, New York. 2nd ed.
16. Hsu S., Walters J., Purgas A. Pollution Tax Heuristics: an empirical study of willingness to pay higher gasoline taxes. Energy Policy 2008, 36:3612-3619.
17. Mankiw G. Raise the gasoline tax. Wall Street J October 20, 2006, available at, accessed in may 12, 2010. http://online.wsj.com/article/SB116131055641498552.html%3Fmod%3Dopinion_main_commentaries.
18. Litman T. Carbon taxes: "Tax what You Burn, not what You Earn" 2008, available at, Victoria Transport Policy Institute, Canada, accessed in December, 2010. http://www.vtpi.org/carbontax.pdf.
19. Macedo I. Commercial perspectives of bBio-Alcohol in Brazil 2000, First World Conference on Biomass for energy and Industry, Sevilla, Spain.
20. Coady D., Gillingham R., Ossowski R., Piotrowski J., Tareq S., Tyson J. Petroleum product subsidies: Costly, Inequitable, and Rising. International Monetary fund (IMF) 2010, Fiscal Affairs Department, February.
21. Davoust R. Gasoline and diesel prices and Taxes in Industrialized countries 2008, Institut Français des Relations Internationales (IFRI), December.
22. Energy Prices & Taxes 2009. International Energy Agency, IEA statistic, Quarterly statistics, fourth quarter 2009, IEA.
23. Hsu S. Carbon Tax Heuristics and Politics: the case of the gasoline tax 2010, Working paper series, available at, Social Science Research Network (SSRN), accessed in April 21. http://papers.ssrn.com/sol3/papers.cfm%3Fabstract_id%3D1121039.
24. Daubanes J. Taxation of oil products and GDP Dynamics of oil-rich countries February, 2009, Zürich, Switzerland.
25. Potential for biofuels for transport in developing countries 2005, ESMAP, Joint UNDP/ World Bank Energy Sector Management Assistance Program (ESMAP), Washington.
26. Gerlagh R., Lise W. Carbon taxes: a Drop in the Ocean, or a Drop that Erodes the Stone? The effect of carbon taxes on technological change. Ecol Econ 2005, 54:241-260.
27. Promoting market access: for the Rural poor in order to achieve the Millennium development Goals 2010, IFAD, available at, International Fund for Agricultural Development (IFAD), accessed in april 14. http://www.ifad.org/4DF01EF4-54FB-484E-BCA7-D26687F08386/FinalDownload/DownloadId-2C05449FB59F683AF7C3636047361C93/4DF01EF4-54FB-484E-BCA7-D26687F08386/gbdocs/gc/26/e/markets.pdf.
28. Gowen M. Biofuels versus fossil fuels in developing countries: How green is the pasture?. Energy Policy 1989, 455-470.
29. Sterner T. Fuel taxes: an important instrument for climate policy. Energy Policy 2007, 35:3194-3202.
30. Beuermann C., Santarius T. Ecological Tax Reform in Germany: Handling two hot potatoes at the same time 2006, Energy policy 34, Elsevier, 917-929.
31. Biofuels for Transport: an international perspective 2004, IEA, International Energy Agency, France, Paris.
32. International energy Statistics: biofuels production and consumption of 2008 2010, EIA, available at, Energy Information Administration, U.S. Department of Energy, accessed in December 15. http://www.eia.doe.gov/cfapps/ipdbproject/IEDIndex3.cfm%3Ftid%3D79%26pid%3D79%26aid%3D1.
33. Ryan L., Convery F., Ferreira S. Stimulating the use of Biofuels in European Union: Implications for climate change policy. Energy Policy 2005, 34:3184-3194.
34. Motor gasoline outlook and state MTBE bans 2010, EIA, available at, Energy Information Administration/US Department of Energy, Washington, DC, accessed in january13. http://www.eia.doe.gov/emeu/steo/pub/special/mtbeban.html.
35. Impact of energy policy Act of 2005 section 206 Rebates on consumers and Renewable energy consumption, with projections to 2010 2010, EIA, available at, Energy Information Administration/US Department of Energy, Washington, DC, accessed in October 10. http://www.eia.doe.gov/cneaf/solar.renewables/page/epact/epact.html.
36. Steenblik R. Biofuels-at what cost? Government support for ethanol and biodiesel in the United States 2010, available at, Report prepared for The Global Subsidies Initiative, Geneva, Switzerland, accessed in November 12. http://www.globalsubsidies.org/files/assets/oecdbiofuels.pdf.
37. Hira A., Oliveira L. No substitute for oil? How Brazil developed its ethanol industry. Energy Policy 2009, 37:2450-2456.
38. Deutsche Gesellschaft Für Technische Zusammenarbeit 2005, GTZ. International Fuel Prices, available at, GTZ, Eschborn, accessed in April 3, 2010. http://www.gtz.de/de/dokumente/en_International_Fuel_Prices_2005.pdf.
39. Almeida E., Bomtempo J., Silva C. The performance of Brazilian biofuels: an economic, environmental and social analysis 2010, discussion paper no. 5, available at, Instituto de Economia, Universidade Fed do Rio de Janeiro, International Transport Forum, accessed in October 10. http://www.internationaltransportforum.org/jtrc/DiscussionPapers/DiscussionPaper5.pdf.
40. Macedo I., Leal M., Silva J. Assessment of greenhouse gas emissions in the production and use of fuel ethanol in Brazil 2010, available at, Governo do Estado de São Paulo, accessed in january 28. http://www.wilsoncenter.org/events/docs/brazil.unicamp.macedo.greenhousegas.pdf.
41. Wang M., Wu M., Huo H. Life-cycle energy and greenhouse gas emission impacts of different corn ethanol plant types 2007, IOP Publishing, Environmental Research Letters, Center for Transportation Research.
42. Peters J., Thielmann S. Promoting biofuels: Implications for developing countries. Energy Policy 2008, 36:1538-1544.
43. Walter A., Rosillo-Calle F., Dolzan P., Piacente E., Cunha C. Perpectives on fuel ethanol consumption and trade. Biomass and Bioenergy 2008, 32:730-748.
44. Plano Decenal de Energia 2010-2019. Empresa de Pesquisa Energética (EPE) 2010, EPE, available at, Ministério de Minas e Energia (MME), Rio de Janeiro, accessed in september 5. http://www.epe.gov.br/PDEE/Forms/EPEEstudo.aspx.
45. Energy information Administration (EIA) 2010, EIA. Annual Energy Outlook, available at, United States Department of Energy, accessed in November 20, 2010. http://www.eia.gov/oiaf/archive/aeo10/index.html.
46. Mistura Carburante - Variação de Percentual 2010, MAPA, available at, Ministério da Agricultura Pecuária e Abastecimento (MAPA), accessed in August 19. http://www.agricultura.gov.br/portal/page?_pageid=33,3900254&_dad=portal&_schema=PORTAL.
47. M. Francescato. O Impacto dos Mercados de Açúcar e Petróleo Americano na Volatilidade do Açúcar Brasileiro. Master of Science Thesis, IBMEC São Paulo. School of Economics and Administration, 2006.
48. X. Wang. The impact of fuel ethanol on Motor gasoline market: Modeling through a system of Structural Equations. Master of Science Thesis, University of Missouri-Columbia, 2008.
49. Anuário Estatístico Brasileiro do Petróleo e do Gás Natural - 2010. Agência Nacional do Petróleo 2010, ANP, available at, Gás Natural e Biocombustíveis (ANP), accessed in November 19. http://www.anp.gov.br/?pg=31286.
50. Atos Cotepe e Convênios ICMS 2010, CONFAZ, available at, Conselho Nacional de Política Fazendária (CONFAZ), accessed in may 17. http://www.fazenda.gov.br/confaz.
51. Bioetanol de Cana-de-Açúcar: Energia para o desenvolvimento sustentável 2008, BNDES and CGEE, Coordenation BNDES e CGEE, Rio de Janeiro. 1st ed.
52. World Economic Outlook Databases: Gross domestic product, current prices (U.S. dollars) 2010, IMF, available at, International Monetary Fund (IMF), accessed in April 6. http://www.imf.org/external/pubs/ft/weo/2010/01/weodata/weoselgr.aspx.
53. Estatísticas Fiscais: Resultado primário da seguridade social 2010, MPOG, available at, Ministério do Planejamento, Orçamento e Gestão (MPOG), Secretaria de Orçamento Federal, accessed in December 31. https://www.portalsof.planejamento.gov.br/bib/estatis_2010.
54. Investimentos em Infraestrutura para o Desenvolvimento Econômico e Social 2010, Brazil, Programa de Aceleração do Crescimento (PAC), available ataccessed in December 31. http://www.brasil.gov.br/pac/o-pac/investimentos-em-infraestrutura-para-o-desenvolvimento-economico-e-social.
55. United nations Conference on Environment and development: Earth Summit 1992, UNFCC, United Nations Framework Convention on Climate Change (UNFCC), Rio de Janeiro, June 3 to 14.
56. Maibach M., Schreyer C., Sutter D., Van Essen H., Boon B., Smokers R., et al. Handbook on estimation of external costs in the transport sector 2008, Produced within the study Internalisation Measures and Policies for All external Cost of Transport, Delf CE.
57. European Union energy and transport in figures: statistical pocketbook 2002, European Commission, Office for Official Publications of the European Communities, Luxembourg.
58. Álvares O., Linke R. Metodologia Simplificada de Cálculo das Emissões de Gases do Efeito Estufa de Frotas de Veículos no Brasil 2010, Available at, accessed in February 22. http://www.ambiente.sp.gov.br/proclima/PDF/inventario_efeitoestufa.pdf.
59. Global, regional, and national Annual time Series 2010, CDIAC, available at, Carbon Dioxide Information Analysis Center (CDIAC), U.S. Department of Energy (DOE), accessed in August 23. http://cdiac.esd.ornl.gov/cdiac/.
60. M. Scandiffio. Análise prospectiva do álcool combustível no Brasil - cenários 2004-2024. Campinas, São Paulo, Doctoral Thesis, Campinas State University, School of Mechanical Engineering, Campinas, 2005.
61. Seabra J. Avaliação tecnico-econômica de opções para o aproveitamento integral da biomassa de cana no Brasil. Doctoral Thesis 2008, Campinas State University, School of Mechanical Engineering, Campinas.
62. Macedo I., Seabra J., Silva J. Greenhouse gases emissions in the production and use of ethanol from sugarcane in Brazil: the 2005/2006 averages and a prediction for 2020. Biomass and Bioenergy 2008, 32:582-595.
63. Climate Change 2007-Synthesis Report. Intergovernmental Panel on climate change (IPCC) 2008, IPCC, WMO, UNEP, Switzerland, Geneva.
64. Developing Harmonised European approaches for transport costing and project Assessment 2010, HEATCO, Available at, IER, Germany, accessed in December 08. http://heatco.ier.uni-stuttgart.de/.
65. Litman T. Climate change emission Valuation for transportation economic analysis 2010, available at, Victoria Transport Policy Institute, Canada, accessed in November 10. http://www.vtpi.org/ghg_valuation.pdf.
66. Watkiss P., Anthoff D., Downing T., Hepburn C., Hope C., Hunt A., Tol R. The social cost of carbon (SCC) Review - Methodological approaches for using SCC estimates in policy Assessment 2010, Final Report, available at, Research on Behalf of UK Defra, accessed in June 13. http://www.decc.gov.uk/assets/decc/what%2520we%2520do/a%2520low%2520carbon%2520uk/carbon%2520valuation/social_cost/aeat-scc-report.pdf.
67. Jungmeier G., Koenighofer K., Varela M., Lago C. Economic and environmental performance of biofuels 2005, Work Package 3, VIEWLS project. Clear Views on Clean fuels: data, potential, scenarios, markets and trade of biofuels, EC project NNE5-2001-00619.
68. Mathews J. Biofuels: what a Biopact between North and South could achieve. Energy Policy 2007, 35:3359-3370.
69. Grupta S., Clements B., Fletcher K., Inchauste G. Issues in domestic petroleum pricing in oil-producing countries 2010, Working Paper - WP/02/140, Fiscal Affairs Department, available at, International Monetary Fund - IMF, accessed in September 21. http://www.imf.org/4DF01EF4-54FB-484E-BCA7-D26687F08386/FinalDownload/DownloadId-E2263AA75F853A5697C99DB332017447/4DF01EF4-54FB-484E-BCA7-D26687F08386/external/pubs/ft/wp/2002/wp02140.pdf.
70. Hammar H., Löfgren A., Sterner T. Political economy Obstacles to fuel taxation: using Granger non-Causality Test to Gauge the Strength of Lobbying 2010, available at, University of Göteborg, accessed in may 30. http://www.hgu.gu.se/files/nationalekonomi/eeu/publications/eeu20%25workingpapers/political_obstacles_wp2003_4pdf.pdf.
71. BLS Commodity Data All commodities (Producer price Index - PPI) 2010, available at, United States Department of Labor, Bureau of Labor Statistics (BLS), accessed in August 19. http://www.bls.gov/data/home.htm.
72. Taxa de Câmbio 2010, BCB, available at, Banco Central do Brasil (BCB), accessed in November 15. http://www4.bcb.gov.br/pec/taxas/port/ptaxnpesq.asp?id=txcotacao.
73. Delgado C., Araújo A., Fernandes V. Properties of Brazilian gasoline mixed with hydrated ethanol for flex-fuel technology. Fuel Process Technol 2007, 88:365-368.
74. Balanço Energético Nacional: ano base 2009. Empresa de Pesquisa Energética (EPE) 2010, EPE, available at, Ministério de Minas e Energia (MME), accessed in November 15. https://ben.epe.gov.br/downloads/Relatorio_Final_BEN_2010.pdf.
75. Constituição da República Federativa do Brasil 1988, Brazil, Available at, accessed in August 15, 2010. http://www.planalto.gov.br/ccivil_03/Constituicao/Constituicao.htm.
76. Goldemberg J., Teixeira S., Nastaric P., Lucond O. Ethanol learning Curve-the Brazilian experience. Biomass and Bioenergy 2004, 26:301-304.
77. Bolsa Família. Ministério do Desenvolvimento Social e Combate à Fome (MDS) 2010, MDS, available at, accessed in November 20. http://www.mds.gov.br/bolsafamilia.
78. Emissions facts: greenhouse gas emissions from a typical passenger vehicle 2010, EPA, available at, United States Environmental Protection Agency (EPA), accessed in November 05. http://www.epa.gov/oms/climate/420f05004.pdf.
79. Spot Prices: Crude Oil in Dollars per Barrel 2010, EIA, available at, Energy Information Administration, U.S. Department of Energy, accessed in October 22. http://www.eia.doe.gov/dnav/pet/pet_pri_spt_s1_d.htm.