Impact of carbon tax on oil and gas fiscal system: an integrated evaluation model. Issue 1 (1st February 2022)

• Record Type: Journal Article
• Authors: Yi, Jiexin; Zhao, Zhe; Peng, Yun; Liang, Tao; Li, Jia; Chen, Huimin; Liu, Chenye
• Is Part Of: IOP conference series. Volume 983:Issue 1(2022)
• Publication Date: 2022-02-01
• Subjects: Earth sciences -- Periodicals; Environmental sciences -- Congresses; Environmental sciences -- Periodicals; 550.5
• DOI: 10.1088/1755-1315/983/1/012097
• Languages: English
• ISSNs: 1755-1307

Abstract

Abstract: This paper estimates the impact of the carbon tax on oil and gas fiscal system. Carbon tax is regarded as the widely used mechanism for carbon policy. However, few studies analyzed the impacts of carbon tax on oil and gas fiscal system. This research addresses the gap by studying how the carbon tax affect the oil and gas industry and the risk of the carbon tax. In this paper, an integrated model considering the impact of the carbon tax in the oil and gas fiscal system and using the Monte-Carlo method to analyze the risk of the carbon tax is put forward. With the purpose of comparing the Royalty and Profit Sharing Contract, the distributions of the revenue are discussed. When the carbon price increases to US$100/ton, the contractor profit will drop to zero under Royalty fiscal system. When the carbon price increases to US$80/ton, the contractor profit will become negative under PSC. The result indicates that high carbon tax results in negative cash flow.