How Should Shale Gas Extraction Be Taxed?

40 Pages Posted: 1 Feb 2018

See all articles by Philip John Daniel

Philip John Daniel

International Monetary Fund (IMF)

Alan Krupnick

Resources for the Future

Thornton Matheson

International Monetary Fund (IMF)

Peter Mullins

International Monetary Fund (IMF)

Ian Parry

International Monetary Fund (IMF)

Artur Swistak

International Monetary Fund (IMF)

Date Written: November 2017

Abstract

This paper suggests that the environmental and commercial features of shale gas extraction do not warrant a significantly different fiscal regime than recommended for conventional gas. Fiscal policies may have a role in addressing some environmental risks (e.g., greenhouse gases, scarce water, local air pollution) though in some cases their net benefits may be modest. Simulation analyses suggest, moreover, that special fiscal regimes are generally less important than other factors in determining shale gas investments (hence there appears little need for them), yet they forego significant revenues.

Keywords: shale gas; environmental risks; corrective taxes; liability; fiscal regime design; simulated projects; marginal effective tax rates, shale gas, environmental risks, corrective taxes, liability, fiscal regime design, simulated projects, marginal effective tax rates, Government Policy, Environmental Economics: Government Policy

JEL Classification: H21, H23, Q38, Q48, Q58

Suggested Citation

Daniel, Philip John and Krupnick, Alan and Matheson, Thornton and Mullins, Peter and Parry, Ian and Swistak, Artur, How Should Shale Gas Extraction Be Taxed? (November 2017). IMF Working Paper No. 17/254. Available at SSRN: https://ssrn.com/abstract=3116210

Philip John Daniel (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Alan Krupnick

Resources for the Future ( email )

1616 P Street, NW
Washington, DC 20036
United States

Thornton Matheson

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Peter Mullins

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Ian Parry

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Artur Swistak

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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