1. Impuestos al Carbono en Latinoamérica y el Caribe Foro Latinoamericano del Carbono
Juan Carlos Belausteguigoitia
Centro ITAM de Energía y Recursos Naturales

2. Contents Properties Political economy Design issues
Map of carbon taxes and ETS

3. Properties Polluter pays principle Static efficiency
Dynamic efficciency
Win-win-opportunities (double dividend)
Institutional ease

4. Political Economy
Distributional impact
Impact on competitiveness

5. Design Issues Tax base and tax rates
Taxation points (as direct as possible)
Use of tax revenues
Pre-announcement
Combination of instruments

6. As of 2017, 42 national and 25 sub-national governments have implemented or planning to implement carbon pricing initiatives.
These jurisdictions are responsible for more than 22 percent of global emissions. Others are developing or considering systems that will put a price on carbon in the future. Altogether, these actions will encompass almost half of global CO2 emissions.

7. Mapa de Impuestos al Carbono y de Sistemas de Emisiones Transferibles
Imagen obtenida de:

8. Mapa de Impuestos al Carbono y de Sistemas de Emisiones Transferibles (el Lejano Oriente y Europa)
Imagen obtenida de:

9. Appendix

10. Implicit price per ton of CO2 (MXN)
CO2 Tax : Initiative of the Executive
Proposed tax of MX$ pesos per ton of CO2 (US$ 5.7 dollars)
Executive Proposal
Fuel
Tax (MXN)
Implicit price per ton of CO2 (MXN)
% change in price
Natural Gas
11.94
cents per m3
70.68
4.1%
Propane
10.50
cents per liter
Butane
12.86
Gasoline
16.21
1.4%
Jet fuel and other kerosene
18.71
1.6%
LP Gas
11.42
1.7%
Diesel
19.17
Fuel Oil
20.74
2.6%
Petroleum Coke
18.99
cents per kg
16.1%
Coal Coke
19.30
17.0%
Mineral Coal
17.83
Others
Estimated reduction: 5.8 million tons of CO2 in 2014.
Income of $26.7 billion pesos (2 billion US dollars) (1.8% of tax revenues of Federal Government in 2012)
Source: Centro Mario Molina, 2013.

11. Approved version by Congress introduces changes that will generate inefficiencies in price signals
Approved carbon tax, 2013 Tax Reform
Fuel
Tax (MXN)
Implicit price per ton of CO2 (MXN)
% Change in price
Natural Gas
0.00
cents per m3
0.0%
Propane
5.91
cents per liter
39.78
Butane
7.66
42.10
Gasoline
10.38
45.26
0.9%
Jet fuel and other kerosene
0.00*
46.84
1.1%
LP Gas
6.59
40.68
1.0%
Diesel
12.59
46.42
Fuel Oil
13.45
45.84
1.7%
Petroleum Coke
1.56
cents per kg
5.80
1.3%
Coal Coke
3.66
13.4
Mineral Coal
2.75
10.92
2.6%
Others
39.80
CMM emphasized the importance of a uniform price per ton of CO2 for all fuels.
However, the discussions in Congress led to a different implicit price per fuel.
Impact in the right direction, but inefficiencies due to different implicit prices.
* The carbon tax does not apply to air fuel because Mexico is a signatory of the Convention on International Civil Aviation (also known as the Chicago Convention) since 1946, which exempts commercial aviation fuel from taxation.

12. Expected reduction of emissions for 2014
(Million tons of CO2)
Reduction of CO2 emissions in 2014 (Mt/CO2)
% of Mexico’s total emissions
Proposal
5.83
1.18%
Approved
1.61
0.33%
Source: Centro Mario Molina.

13. Phasing out gasoline and diesel subsidies.
Monthly consumption of regular gasoline (low octane)
(Ene 97- Abr 13)
Real price of regular gasoline (low octane)
(Ene 97- Abr 13)

14. Carbon tax and gasoline subsidies phase out:
achieving 1/6 of Mexico’s goal
Estimated emissions reduction
(CO2e/year)
Carbon tax
1.6 million tons
Gasoline and diesel subsidy phase out
5.4 million tons
7 million tons
In perspective
These two policies represent 1/6 of the yearly emissions reductions necessary to achieve the Mexican voluntary target.
In 2010, Mexico pledged in the Cancun Agreements, to reduce 30% of its emissions by 2020.

15. Taxes as GDP Percentages in OECD Countries

16. Carbon pricing is a necessary part of a larger package of policies that can reduce greenhouse gas emissions.
Performance standards
Fiscal instruments
Renewable portfolio standards
Trade policies
Law enforcement
Information

17. All OECD member countries apply several environmentally related taxes
All OECD member countries apply several environmentally related taxes. A database operated in co-operation between OECD and the European Environment Agency (EEA), currently details about 375 such taxes in OECD countries – plus i.a. some 250 environmentally related fees and charges. The taxes raise revenues in the order of 2-2.5% of GDP.
The environmental effectiveness and economic efficiency of the environmentally related taxes could, however, be improved further if existing exemptions and other special provisions were scaled back.