A Model for Utilizing Spillover Taxes and Community-Based Funds to Fill the Green Energy Financing Gap in Asia
Yoshino, Naoyuki; Taghizadeh-Hesary, Farhad | December 2018
Abstract
In 2016, 88.90% of Asia and the Pacific’s primary energy consumption was from fossil fuel, and almost 40% of the global CO2 emissions were from Asia and the Pacific. In order to ensure the increasing energy needs of the region are in line with sustainable development goals, addressing the financing gaps of green-energy projects is critical. The major challenge for filling the financing gaps of green energy is the lower rate of return on green projects compared to fossil fuels. Electricity tariffs are often regulated by governments. Electricity has to be kept low in price to serve every household as a necessary good. Green energy’s sources of revenue are only from user charges. Hence, it is not so attractive to investors. This paper proposes a model for utilization of the tax revenue spillover from green-energy supply by returning a portion of the taxes to green-energy projects in order to increase their rate of return. In addition, the paper proposes a social community-based funding scheme for smaller-scale green projects (e.g., solar and wind). The paper theoretically shows that using this model for funding green-energy projects will increase the rate of return and make them feasible and interesting to private investors.
Citation
Yoshino, Naoyuki; Taghizadeh-Hesary, Farhad. 2018. A Model for Utilizing Spillover Taxes and Community-Based Funds to Fill the Green Energy Financing Gap in Asia. © Asian Development Bank Institute. http://hdl.handle.net/11540/9369.Keywords
Alternative energy
Alternative energy development
Photovoltaic Energy
Geothermal Energy
Urban Development Finance
Trade Finance
Small Business Finance
Rural Finance
Roundtable on International Trade and Finance
Regional Development Finance
Public Service Finance
Public Finance
Project Finance
Private Finance
Nonbank Financing
Non-Bank Financial Institutions
Municipal Finance
Local Government Finance
Local Currency Financing
Limited Resource Financing
International Financial Institutions
Infrastructure Financing
Industrial Finance
Government Financial Institutions
Government Finance
Financing of Infrastructure
Financial Sector Development
Financial Regulation
Alternative energy program
Alternative energy technology
Energy Demand
Energy planning
Energy Resources
Energy Resources Development
Primary Energy Production
Primary Energy Supply
Taxation
Public Accounting
National Budget
Municipal Bonds
Local Government
Local Taxes
International Monetary Relations
International Financial Market
International Banking
Central Banks
Business Financing
Capital Resources
Budgetary Policy
Capital Needs
Corporate Divestiture
Capital Instruments
Pension Funds
Insurance Companies
Banks
Portfolio Management
Fiscal Administration
Economics of Education
Development Banks
Green technology
Energy conversion
Electric power consumption
Cost effectiveness
Inventions
Sun
Solar heating
Solar energy
Renewable energy source
Power resource
Natural resource
Energy harvesting
Energy development
Energy facility
Power supply
Solar activity
Solar constant
Earth
Weather
Renewable energy resource
Energy security
Energy tax credit
Energy assistance
Solar energy policy
Conservation of natural resources
Use tax
Taxing power
State of taxation
Tax-sales
Tax revenue estimating
Tax planning
Spendings tax
Special assessments
Tax administration and procedure
Sales tax
Real property and taxation
Progressive taxation
Effect of taxation on land use
Effect of taxation on labor supply
Intergovernmental tax relations
Inheritance and transfer tax
Energy tax
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