VIETNAM NATIONAL UNIVERSITY UNIVERSITY OF ECONOMICS AND BUSINESS GRADUATION THESIS IMPACT OF THE CARBON TAX ON THE RAILWAY INDUSTRY Supervisor : MSc. Luu Hanh Nguyen Student : Phan Thi Diem Quynh Class : QH-2019-E - TCNH - CLC4 ID code : 19050725 Ha Noi, March 2023 VIETNAM NATIONAL UNIVERSITY UNIVERSITY OF ECONOMICS AND BUSINESS Faculty of Finance and Banking IMPACT OF THE CARBON TAX ON THE RAILWAY INDUSTRY SUPERVISOR : MSc. Luu Hanh Nguyen STUDENT : Phan Thi Diem Quynh - 19050725 CLASS : QH-2019-E - TCNH - CLC4 Ha Noi, May, 2023 TABLE OF CONTENT WV. 6 LIST OF TABLES.e-- sex Hà nà HH HH HH HH HH1 THTTHLkETrkrrrkkrrrkerrrkerrrke 7 S100 6.---5scLHHHHHHHHH HH HH HH HH ghe ghiàu 9 1.
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The parts using references in the thesis have been clearly stated in the references and cited according to the regulations of the faculty. The data and results presented in the thesis are completely honest, if wrong, I will take full responsibility and bear all the discipline of the subject and the university. Supervisor’s Approval Student Hanoi, March 2023 Student Phan Thi Diem Quynh LIST OF ABBREVIATION European Union Fixed Effects Model Gross domestic product Renminbi Statistical software for data science a statistical database provided by the United Nations System Variance Inflation Factor World Development Indicators Fixed Effects LIST OF TABLES Table 3.1: Description of variables Table 4.1: Descriptive Statistics Table 4.2: Matrix of Correlations Table 4.3: Multicollinearity illustration from VIF coefficient Table 4.4: Baseline analysis results from regression model Table 4.5: Effect of carbon tax on fossil energy ABSTRACT The world entered the period ofindustrialization and modernization, making people's lives more developed and convenient. The means of transportation that are operated every day allow people to move by machines at a speed many times faster than walking on foot or rudimentary non-mechanical vehicles.
This realistically depicts modern life when faced with the challenge of controlling carbon emissions into the environment on a daily basis. Efforts to reduce carbon emissions are chosen by countries around the world by setting a carbon price. The carbon tax policy is one of them. Using the data table from 2010 to 2021, the following study analyzes the effect of carbon tax on the transportation industry by FEM method in a regression model.
The results show that a carbon tax has the potential to reduce goods transport in the rail industry. This is an indirect expectation for reducing carbon emissions, creating incentives for environmental protection as well as sustainable financial development. Keywords: Carbon tax, rail industry, goods transport, reduce carbon emissions CHAPTER I: INTRODUCTION 1. The urgency of the topic Increasing carbon emissions set off alarm bells for global warming.
This is a threat to the living environment of humans and ecosystems from nature, leading to obstacles in the development of the economy. (Parmesan and Yohe, 2003; Gleick et al.,, 2010) Carbon emission is created by burning energy such as coal, diesel, gas and gasoline,. These types of energy are the main fuels used in the transportation industry to serve the purpose. destination for passengers and goods.
According to a report by the International Energy Agency (IEA) in March 2023, carbon dioxide emissions from coal increased by 1.6%, and from gasoline by 2. Before that, in November 2022, at the COP27 Climate Summit in Egypt, scientists said that carbon dioxide emissions from fossil fuels, the main cause of climate change, are on the rise. 1% in 2022 to hit an all-time high. Carbon pricing is seen as a tool to reduce sustainable emissions and help the earth keep average temperatures below 1.
Carbon tax - a form of carbon pricing that operates on the basis of a taxing mechanism on the carbon content of fuels in the energy and transportation industries. Therefore, these industries can find the best alternative fuel with low cost in the combustion process while helping to reduce carbon emissions to the environment (Anser et al. Implementing a carbon tax is a practical and effective measure to reduce carbon emissions. Currently in the world, there are many countries that apply this tax such as France, Finland, Japan, Denmark, Norway,.
and the reality from other countries shows that there exists an important role of government. carbon tax policy in the process of reducing emissions (Zhoua et al.,2018; Pigou, 1920; Al- Abdullah, 1999) The transportation industry plays an important role for the national economy because the development of the transportation industry increases entertainment activities, develops tourism and services, and bridges activities. trade between countries. The efficient transport of passengers and goods will make society more and more modern., Aidas and Grazvydas., 2009) Along with the rapid development of the transportation industry, natural resources are gradually being consumed excessively, leading to environmental pollution and carbon emissions.
With long trips with a travel range of thousands of kilometers in densely populated areas, rail and air transport are often chosen by passengers to move or travel. This increases competition between the railway industry and low-cost airlines (Dalla et al., 2017; Wang et al., 2017) Researchers around the world have been trying to find out the difference in carbon emissions between the railway industry and the rest of the transportation industry. According to research by Sinan et al., (2020), rail transport has the potential to reduce the impact of carbon emissions. Meanwhile, some other scholars consider that the construction of infrastructure has a significant influence on the development of the transportation industry (Lee and Yoo, 2016), the railway system is evaluated as one of the most important infrastructures worldwide (Martinez et al., 2019), the construction and periodic repair of railway infrastructure must also consume a large amount of energy, creating emissions into the environment (Raymond, 1998; Yan, Zhou and Xun.,2021) Besides, in practice there is still the fact that ignoring actual energy consumption or separate consumption only reports overall consumption (Pablo et al., 2019) The lack of data from the real world and the increasing demand for rail transport provide research impetus for emissions reductions in this sector.
Summarizing the issues mentioned above, | clearly see the urgency and necessity to protect the Earth from global warming. The transportation industry and carbon emissions are always hot topics of all time. Moreover, the railway industry is also a popular means of transportation for long distances and the needs ofpassengers are increasing. A suitable carbon pricing tool is needed to measure carbon emissions from this transport sector.
Therefore, this paper explores how the carbon tax policy has affected the transportation industry: the railway industry. Research objectives The objective of this research is to find out the impact of the carbon tax on the railway industry. Given the high passenger demand for rail transport and the rail industry's competition with the aforementioned low-cost airlines, the expected research objective of this study is to explore the impact of carbon tax policy on the transport of goods and passengers in the railway industry. This will have indirect implications for reducing carbon emissions into the environment every day.
Researchers have shown that there exists a positive relationship between human travel needs and changes in carbon emissions.(Lakshmanan and Han. Hickman et al., 2010 ; Zhoua et al.,2018) Ina 10 recent study by Alexander and Christian (2022), the economic point of view is addressed with the carbon pricing tool - a carbon tax becomes a suitable tool to reduce transportation in the transport sector. thereby reducing emissions to the environment. To accomplish that research goal, the study will collect data including carbon tax,railways goods and passengers, then will look at controls such as GDP, population, urban, employment.
, renewable, fuel import, CO2 emission and using quantitative methods. I will measure the impact of the carbon tax, first on goods, then on passengers and finally on rail total (including goods and passengers). From there, I found out the impact of the carbon tax policy on rail transport and combined it with previous references to increase the objectivity of this study. Research questions The main research question in this paper comes from the discussion of the above topic.
What is the impact of a carbon tax on the movement of goods and passengers in the rail industry? Today, high-speed rail using electric energy is quite common in the rail transport network, especially in developed and developing countries. The development of high- speed railway is meant to greatly improve the convenience of people and increase the interrelationship between cities in the country, boosting the economy of countries (Pablo et al., 2019) However, although using electric power is much friendlier than coal or diesel fuel, high-speed rail faces the idea that with daily travel frequency, average travel speed is fast and Frequent stops at train stations will damage the railway construction infrastructure. This means increased energy consumption and daily carbon emissions, especially in densely populated areas.(Yan, Zhou and Xun.,2021) Besides, in the world, countries are still using train networks using coal and diesel fuel - fossil energy sources with high carbon emissions when burned, including: Vietnam, Germany, Norway, Finland, England,Africa. Rail transport is assessed for its emission approach based on direct and indirect factors.(Marko et al.,2019) Consumption of energy from coal, diesel, and electricity is considered a direct factor.
Indirect factors are considered by railway construction infrastructure, infrastructure maintenance over time, vehicle production, etc. In which, in this research paper, I find out. on the transport factor - an indirect factor to the emissions of the railway industry. Research scopes This study focuses on studying the impact of carbon tax on rail transport in 28 countries around the world in the period from 2010 to 2021.
The first country to apply a carbon tax in the world was Finland in 1990, followed by Norway and Sweden with the introduction of this tax in 1991. The carbon tax first appeared at the end of the twentieth century - the 1990s, undergoing policy reforms and policy experiments, the remaining countries also began to apply this tax and the period 2010- 2021 is the development period of a carbon tax more than before, countries also apply this tax more commonly. These countries are both developed and developing countries, 2010-2021 is also the latest period. This shows the feasibility for the study of the topic.During the research process, the analysis of the impact of the carbon tax on the transport of passengers and goods in the railway industry was focused on.
Besides, the energy consumption factor and other factors such as gdp, population, urban, renewable fuel import are also considered by the study to perform data analysis to increase the significance of this topic.