Essay --

INTRO: state the q; motivate it; history facts A number of EU members have implemented environmental tax reforms (ETRs) which are defined as a reform of the national tax system that shift the tax burden from taxation of labor to taxation of carbon-energy, and the reforms were first introduced in Scandinavian countries since 1990 and then applied in other European countries, such as, Germany and Britain (PTAK, 2010; COMETR, 2007). This project summarizes an assessment of the German ETR and its effect on technological innovation by trying to answer the research question: Did the German ETR increase technological innovation? The question is motivated by general environmental considerations, for instance, slowing down the global warming by reducing energy consumptions and carbon emissions. My paper’s aim is to assess the effect of the German ERTs on technology innovation level specifically, and this is motivated by the following relevant facts. The German ETR was launched in April 1999, and it has been adopted in Germany for m ore than ten years; thus, there are plenty of available data for us to assess the impacts of this ETR regarding to German government’s motivations. This ETR was proposed because the German government wanted to increase technology innovation, to create additional jobs, and to decrease energy consumption (Agnolucci, 2009; Beuermann and Santarius, 2006). Moreover, it is important for us to assess the impacts of ETRs from different angles, for example, the level of technology innovation, rather than assessing the impacts on the level of energy consumption and employment that abundant papers have discussed. The rest of the paper is organized as follows. Section 2 presents a literature review of the related literature ... ...atively; hence, it can be concluded that the ETR in Germany had a positive impact on reducing energy consumption, and the effect on employment is overall small and can be positive (Agnolucci, 2009)†¦..however†¦. Moreover, Agnolucci applied an econometric approach to assess the effect of the environmental tax reforms introduced in Germany and the UK, especially their effects on energy consumptions and employment level†¦. In this paper, the author modelled his data by sorting them into the following various economics subsectors: Textiles and leather (TXT); Pulp, paper and printing (PPP); Rubber and plastics (RP); Non-metallic minerals (NMM); Machinery (MAC); Electrical and optical equipment (ELE); Wholesale and retail trade (TRA) which covered almost the whole spectrum of manufacturing activity. Therefore, I am able to use these subsectors later in my solving process.