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Europe > Norway

You are looking at 1 - 10 of 54 items for :

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Cover IMF Working Papers
Firms’ Response to Climate Regulations-Empirical Investigations Based on the European Emissions Trading System
Fotios Kalantzis
,
Salma Khalid
,
Alexandra Solovyeva
, and
Marcin Wolski
Using a novel cross-country dataset, which merges firm-level financials with information on firms’ participation in the European Unions’ Emissions Trading System (ETS), we investigate how firm performance is affected by tightening of environmental policies that put a price on pollution. We find that more stringent policies do not have a strong negative impact on the profitability of ETS-regulated or non-ETS firms. While firms report an increase in their input costs during periods of high carbon prices, their reported turnover is also higher. Among ETS-regulated firms which must purchase emission certificates under the EU ETS, tightening of climate policies in periods of high carbon prices results in increased investment, particularly in intangible assets. We establish robustness of our results using a quantile regression analysis, ensuring our key findings are not driven by distributional irregularities. Our findings provide support for the benefits of EU ETS on accelerating firms’ climate transition, while keeping firm-level financial costs at bay.
Keywords:
climate finance; climate change; decarbonization; firm-level analysis; Emissions Trading System (ETS); ETS firm; climate transition; EU Emissions Trading System; ETS-regulated firm; IMF working paper No. 24/135; Emissions trading; Climate policy; Environmental policy; Greenhouse gas emissions; Global
Cover IMF Working Papers
A New Fiscal Framework for Resource-Rich Countries
Mr. Luc Eyraud
,
William Gbohoui
, and
Mr. Paulo A Medas
This paper revisits the debate on the design of fiscal rules in resource-rich countries. Its main objective is to assess alternative systems of rules against their policy objectives, while taking into account country characteristics. One of the contributions of the paper is to propose fiscal frameworks that are centered around the principle of insurance against shocks and less reliant on estimating precisely resource wealth, which tends to be highly volatile.
Keywords:
Fiscal Policy; Fiscal Rules; Non-Renewable resources; Resource Funds; Nonrenewable Resource Exporting Countries; resource wealth; personal income hypothesis; financial assets floor; IMF working paper 23/230; net financial assets; policy objective; resource revenue; Natural resources; Commodity prices; Global
Cover IMF Staff Country Reports
Chile: Technical Assistance Report-Fiscal Considerations in Managing Stabilization Funds
International Monetary Fund. Fiscal Affairs Dept.
This technical assistance report on Chile highlights fiscal considerations in managing stabilization funds. Chile’s strong fiscal framework has served the country well. Cross-country experience shows that an adequate buffer in stabilization fund can facilitate governments’ response to shocks. Rebuilding fiscal buffers in a holistic framework can help Chile better manage tail risks. The quantitative models suggest that keeping debt well below the current prudent ceiling on central government gross debt at 45 percent of gross domestic product is appropriate. The government can reduce public debt to give space for future borrowing in adverse times or accumulate liquid assets to rebuild fiscal buffers. Fiscal efforts to achieve a broadly balanced fiscal position are an important way to rebuild buffers. The government should avoid borrowing more debt at high interest rates to save assets in the stabilization fund. Overall, the pace of building buffers should be tailored to economic conditions.
Keywords:
IMF's Fiscal Affairs Department; Tail risk; public treasury; Mexico budget revenues stabilization fund; support fund; size of stabilization funds; Fiscal risks; Fiscal stance; Natural disasters; Global
Cover Staff Climate Notes
How to Cut Methane Emissions
Ian W.H. Parry
,
Mr. Simon Black
,
Danielle N Minnett
,
Mr. Victor Mylonas
, and
Nate Vernon
Limiting global warming to 1.5 to 2°C above preindustrial levels requires rapid cuts in greenhouse gas emissions. This includes methane, which has an outsized impact on temperatures. To date, 125 countries have pledged to cut global methane emissions by 30 percent by 2030. This Note provides background on methane emission sources, presents practical fiscal policy options to cut emissions, and assesses impacts. Putting a price on methane, ideally through a fee, would reduce emissions efficiently, and can be administratively straightforward for extractives industries and, in some cases, agriculture. Policies could also include revenue-neutral ‘feebates’ that use fees on dirtier polluters to subsidize cleaner producers. A $70 methane fee among large economies would align 2030 emissions with 2oC. Most cuts would be in extractives and abatement costs would be equivalent to just 0.1 percent of GDP. Costs are larger in certain developing countries, implying climate finance could be a key element of a global agreement on a minimum methane price.
Keywords:
Climate change mitigation; methane emissions; Global Methane Pledge; carbon pricing; methane tax; extractives; agriculture; design issues; border methane adjustment; international price floor; IMF staff Climate note; methane emission; IMF staff Climate Note 2022/008; IMF analysis; Greenhouse gas emissions; Natural gas sector; Agricultural sector; Agricultural commodities; Global
Cover IMF Staff Country Reports
Norway: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Norway
International Monetary Fund. European Dept.
The economy bounced back strongly from the first wave of Covid-19 pandemic, and the recovery is well entrenched in 2022. However, risks to the outlook are considerable, given the uncertainty over spillovers from the war in Ukraine, the intensity of the pandemic globally, and in Europe, in particular, and supply bottlenecks. Given the strong fundamentals, Norway is relatively shielded and there are both upside (higher energy prices and export volumes) and downside risks (lower demand from Europe for non-energy exports). The forecast is especially sensitive to where energy prices settle, whether energy supply to Europe will be disrupted, and Norway’s capacity to increase gas supplies to Europe.
Keywords:
liability positions vis-à-vis nonresident; money market rate; inflation pressure; normalising economy; core inflation; Inflation; Mortgages; Climate change; Global; Europe
Cover IMF Working Papers
Climate-Related Stress Testing: Transition Risk in Colombia
Can Sever
and
Manuel Perez-Archila
This paper builds a framework to quantify the financial stability implications of climate-related transition risk in Colombia. We explore risks imposed on the banking system based on scenarios of an increase in the domestic carbon tax by using bank- and firm-level data. Focusing on the deterioration of firms’ balance sheets and the exposure of banks to different sectors, we assess the extent to which such policy shock would transmit from nonfinancial firms to the banking system. We observe that sectors are affected unevenly by a higher carbon tax. Agriculture, manufacturing, electricity, wholesale and retail trade, and transportation sectors appear to be the most important in the transmission of the risk to the banking system. Results also suggest that a large increase in the carbon tax can generate significant but likely manageable financial stability risks, and that a gradual increase in the carbon tax to meet a higher target over several years could be preferable in terms of financial risks. A gradual increase would also have the benefit of allowing for a smoother adjustment to higher carbon tax for stakeholders.
Keywords:
Climate crisis; climate change; transition risk; carbon emission; carbon tax; green economy; environmental taxes; banking stress; stress testing; financial stability; Colombia; D. banking data; risk to the banking system; nonfinancial firm; Carbon tax; Greenhouse gas emissions; Commercial banks; Loans; Global; Caribbean
Cover Policy Papers
Implementation Plan in Response To The Board-Endorsed Recommendations From The IEO Evaluation Report On IMF Collaboration With The World Bank On Macro-Structural Issues
International Monetary Fund. Strategy, Policy, & Review Department
This Management Implementation Plan (MIP) focuses on further strengthening collaboration between the IMF and the World Bank on strategic macro-structural issues. In macro-structural areas, the Fund and the Bank have complementary roles. The Bank provides structural and development-focused assessments and recommendations, while the Fund focuses on integrating macro relevant structural issues in the macroeconomic frameworks and policies. In some areas, including financial sector and public debt sustainability assessments, Bank-Fund collaboration modalities are well established. In other areas, such as climate change, Fund staff is developing comprehensive strategies on how the IMF can step up its engagement and collaboration with external partners, including with the World Bank, to better serve its membership. This MIP proposes concrete steps aimed at further enhancing: • Bank-Fund collaboration on strategic macro-structural issues, with an initial focus on the climate workstream; • Fund staff’s incentives for collaboration with external partners, including the Bank • Access to and exchange of information and knowledge between Bank and Fund staff.
Keywords:
Bank-Fund collaboration; macro-structural policies; structural reforms; climate change; fund staff; climate strategy; transparency policy; IMF surveillance; Board paper; Climate change; Climate finance; Global
Cover IMF Staff Country Reports
Norway: Selected Issues
International Monetary Fund. European Dept.
Selected Issues
Keywords:
aggregate emission saving; D. cost effectiveness; copyright page; electric vehicle ownership; one-off registration tax; Tax incentives; VAT exemptions; Greenhouse gas emissions; Income; Global
Cover IMF Working Papers
Electric Vehicles, Tax incentives and Emissions: Evidence from Norway
Youssouf Camara
,
Bjart Holtsmark
, and
Florian Misch
This paper empirically estimates the effects of electric vehicles (EVs) on passenger car emissions to inform the design of policies that encourage EV purchases in Norway. We use exceptionally rich data on the universe of cars and households from Norway, which has a very high share of EVs, thanks to generous tax incentives and other policies. Our estimates suggest that household-level emission savings from the purchase of additional EVs are limited, resulting in high implicit abatement costs of Norway’s tax incentives relative to emission savings. However, the estimated emission savings are much larger if EVs replace the dirtiest cars. Norway’s experience may also help inform similar policies in other countries as they ramp up their own national climate mitigation strategies.
Keywords:
emission savings; passenger car emission; savings from the purchase; car usage preference; purchased EVs; Tax incentives; Income; VAT exemptions; Greenhouse gas emissions
Cover IMF Working Papers
Are Climate Change Policies Politically Costly?
Davide Furceri
,
Michael Ganslmeier
, and
Mr. Jonathan David Ostry
Are policies designed to avert climate change (Climate Change Policies, or CCPs) politically costly? Using data on governmental popular support and the OECD’s Environmental Stringency Index, we find that CCPs are not necessarily politically costly: policy design matters. First, only market-based CCPs (such as emission taxes) generate negative effects on popular support. Second, the effects are muted in countries where non-green (dirty) energy is a relatively small input into production. Third, political costs are not significant when CCPs are implemented during periods of low oil prices, generous social insurance and low inequality.
Keywords:
EPS change; policy design; Policy implication; popular support; baseline model; Climate change; Climate policy; Fuel prices; Environmental policy; Natural disasters; Global