Carbon pricing pass-through: Evidence from Ontario and Quebec's wholesale gasoline markets

Can Erutku

Energy Policy, 2019, vol. 132, issue C, 106-112

Abstract: Governments in Ontario and Quebec, two Canadian provinces, have required their fuel distributors to participate in carbon markets and to buy allowances covering their greenhouse gas emissions. The resulting carbon pricing can impose an indirect tax on gasoline retailers through the higher wholesale price they pay. This paper's goal is to measure carbon pricing pass-throughs in Ontario and Quebec's wholesale gasoline markets. Although carbon pricing pass-throughs are uniform within each province, they are higher in Ontario where over-shifting is observed. Higher (lower) levels of pass-throughs in Ontario (Quebec) might be explained by less (more) competitive wholesale gasoline markets.

Keywords: Wholesale gasoline; Carbon pricing; Pass-through; Over-shifting (search for similar items in EconPapers)
JEL-codes: L10 L11 Q40 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:132:y:2019:i:c:p:106-112

DOI: 10.1016/j.enpol.2019.05.026

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