EU Policies and Regulation on CO2, Renewables and Energy Efficiency: A Critical Assessment of Recent Experiences - Green Energy and Efficiency: An Economic Perspective - page 28

decarbonisation of the economy. A case in point is the cost of CO 2 emission
allowances, to which the electricity sector is subject due to its inclusion in the
EU ETS. It is obliged to reduce emissions and incurs a cost for every tonne of
CO 2 . In order to quantify this impact, the price of CO 2 futures and their
repercussion on the market price are taken into account. Another energy and
taxation policy decision that has an impact on the price of electricity is Act
15/2012 of 27 December on tax measures for energy sustainability, which
introduces charges and fees that increase the cost of the technologies used for
electricity generation. Although the exact extent of this impact is not yet known,
a signi

cant portion of the cost of these new tax rates will be internalised in the
price of electricity in the wholesale market. As a conservative estimate, an
increase in the whole market price of electricity of 5/MWh can be expected.

In analysing the hydrocarbons used in the transport sector 14 VAT, the special
tax on hydrocarbons and the cost incurred by the sector for mixing biofuels
are all taken into account. As regards income, it is assumed that there is an
informal subsidy (net income), as the revenue from road and registration tax
does not cover the total cost of infrastructures (which it should in theory
cover), and there is no other tax whereby drivers take on this cost.
In view of the foregoing, the costs in Euros per gigajoule would be
approximately as follows (Fig. 3 ):
The

€

gures in the above table sum up most of the ideas set out in this chapter.
Thus, by analysing energy and environmental taxation from a broad con-
ceptual perspective

—

including the extraordinary costs derived from energy,
environmental or social decisions

it is proved that electricity consumers
(taking into account the aforementioned adjustments) pay for each unit of
energy consumed almost three times more in charges that are unrelated to
supply (

—

€ 19.18/GJ) than consumers of petrol/gas-oil ( € 6.56/GJ) do.

Finally, most comparative analyses of energy and environmental taxation in
different countries do not include regional taxes (e.g. Taxing Energy Use ). This
leaves out most of the

scal pressure in countries with highly decentralised
administrative structures, such as the US, Germany or Spain. In the latter country,
exponential growth in new environmental taxes on electricity facilities and gener-
ation is a highly signi cant phenomenon.

The complementary analysis proposed in this section of the link between energy
taxation applied to each sector and its economic contribution to meeting energy and
environmental policy targets is completed with a numerical analysis in the section
devoted to Spain. It combines the tax burden on each sector and its economic
contribution via regulatory instruments (such as the CO 2 market, support frameworks

14

This is simpli ed by considering petrol and gas - oil consumption.