Alternatives to private finance

Role of fiscal policy reforms and energy taxation in development of renewable energy projects

Naoyuki Yoshino, Farhad Taghi Zadeh Hesary

Research output: Chapter in Book/Report/Conference proceedingChapter

4 Citations (Scopus)

Abstract

The main obstacle to the development of Renewable Energy (RE) projects is lack of access to finance. Electricity tariff is often regulated by the government, hence, to increase the investment incentives the spill over effects originally created by energy supplies need to be used. Tax revenues are refunded to the investors in energy projects and such fiscal policy reform will increase the rate of return of energy projects. For smaller-size energy projects, this chapter provides a theoretical model for combining utilisation of carbon tax and a new way of financing risky capital, i.e., Hometown Investment Trust Funds (HITs). Because of the Basel capital requirement, and because most RE projects from the point of view of financers are considered to be risky projects, and thus many financers are reluctant to lend to them or they lend at high interest rates. This chapter theoretically shows that by taxing carbon dioxide (CO2), sulphur dioxide (SO2), and nitrogen oxides (NOx) and allocating those tax revenues to HITs, RE projects will become more feasible and more interesting for hometown investors, hence the supply of investment money to these funds will increase.

Original languageEnglish
Title of host publicationFinancing for Low-carbon Energy Transition
Subtitle of host publicationUnlocking the Potential of Private Capital
PublisherSpringer Singapore
Pages335-357
Number of pages23
ISBN (Electronic)9789811085826
ISBN (Print)9789811085819
DOIs
Publication statusPublished - 2018 Jun 23
Externally publishedYes

Fingerprint

fiscal policy
policy reform
finance
energy
investment incentive
pollution tax
interest rate
nitrogen oxides
taxation
project
Renewable energy
Private finance
Fiscal policy
Energy taxation
Policy reform
Energy
sulfur dioxide
electricity
carbon dioxide
Tax revenues

Keywords

  • Carbon tax
  • Hometown investment trust funds
  • Renewable energy

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)
  • Business, Management and Accounting(all)
  • Environmental Science(all)

Cite this

Yoshino, N., & Taghi Zadeh Hesary, F. (2018). Alternatives to private finance: Role of fiscal policy reforms and energy taxation in development of renewable energy projects. In Financing for Low-carbon Energy Transition: Unlocking the Potential of Private Capital (pp. 335-357). Springer Singapore. https://doi.org/10.1007/978-981-10-8582-6_13

Alternatives to private finance : Role of fiscal policy reforms and energy taxation in development of renewable energy projects. / Yoshino, Naoyuki; Taghi Zadeh Hesary, Farhad.

Financing for Low-carbon Energy Transition: Unlocking the Potential of Private Capital. Springer Singapore, 2018. p. 335-357.

Research output: Chapter in Book/Report/Conference proceedingChapter

Yoshino, N & Taghi Zadeh Hesary, F 2018, Alternatives to private finance: Role of fiscal policy reforms and energy taxation in development of renewable energy projects. in Financing for Low-carbon Energy Transition: Unlocking the Potential of Private Capital. Springer Singapore, pp. 335-357. https://doi.org/10.1007/978-981-10-8582-6_13
Yoshino N, Taghi Zadeh Hesary F. Alternatives to private finance: Role of fiscal policy reforms and energy taxation in development of renewable energy projects. In Financing for Low-carbon Energy Transition: Unlocking the Potential of Private Capital. Springer Singapore. 2018. p. 335-357 https://doi.org/10.1007/978-981-10-8582-6_13
Yoshino, Naoyuki ; Taghi Zadeh Hesary, Farhad. / Alternatives to private finance : Role of fiscal policy reforms and energy taxation in development of renewable energy projects. Financing for Low-carbon Energy Transition: Unlocking the Potential of Private Capital. Springer Singapore, 2018. pp. 335-357
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