Can Erutku publishes three new papers in Energy Policy, Canadian Public Policy and Economics Bulletin

Can Erutku publishes new papers in Energy Policy, Canadian Public Policy and Economics Bulletin. For a full list of publications, please refer to the following link:

Carbon Pricing Pass-Through: Evidence from Ontario and Quebec’s Wholesale Gasoline Markets

Energy Policy, vol. 132, p. 106-112September 1, 2019

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.

Carbon Tax at the Pump in British Columbia and Quebec

Canadian Public Policy, vol. 44, no. 2, p. 126-133January 1, 2018

British Columbia and Quebec introduced a carbon tax on the sale of retail gasoline in July 2008 and October 2007, respectively. Our findings suggest that the British Columbia carbon tax had a short-term negative effect on gasoline consumption per-capita and led to an amplified behavioural response but only initially. This might have been the consequence of a constant carbon tax after July 2012. In comparison, we find weak evidence that the Quebec carbon tax had a negative effect on gasoline consumption per capital and created an amplified behavioural response. Furthermore, these impacts appeared only years after the introduction of the Quebec carbon tax. This delay might be explained by the increase in carbon cost incurred by Quebec fossil fuel distributors following their participation in the Western Climate Initiative Regional Carbon Market, which started in January 2015. We believe, however, that more research is necessary to reach more definitive conclusions about the effect of carbon taxes on gasoline consumption.

Synthetic Control Method at the Pump: The Petro-Canada/Suncor Merger

Economics BulletinNovember 1, 2017

We use the synthetic control method to measure the impact of the 2009 merger between Suncor and Petro Canada on retail gasoline prices in Toronto. We find that the merger did not lead to a substantial lessening of competition, perhaps due to the divestiture process or from the remaining effective competition post merger. Because the analysis is very economical in terms of data requirement, the synthetic control method may be useful in antitrust analysis and merger control, particularly in industries where products are relatively homogeneous.