Tax Incentives in Public Administration Strategy for Territorial Leadership in Energy Conservation

Abstract

The aim of the study is to identify levers and determine prospects for promoting energy conservation with the help of tax policy tools, which formscompetitive advantages of a territory in the struggle for leadership in world markets. The article analyses statistical data on energy intensity and energy consumption, which are formed by the World Energy Council (WEC) and International Energy Agency. The analysis of trends in using energy resources indicates that there is an increase in the global electricity consumption; one of the pressing problems faced by society is high rates of energy consumption in the manufacturing sector of developing countries, making products of the countries uncompetitive in world marketsdue to their cost; at the same time, there is a decrease in electricity consumption per unit of GDP for 2016-2017 and a further decrease of 27 % is forecasted for the period 2017-2040.There observed a significant gap in the energy intensity of countries with different economic structures, which is explained by the presence of energy-intensive industries. However, the downward trend in energy intensity in these countries indicates a decrease in their industrial activity caused by the crisis. The driversofthe need for promotingenergy conservation – economic, political and ecological ones – are defined.The influence of state regulation of energy conservation on the leadership of territories in the competition in world markets through tax incentivesis substantiated. The practices in using tax incentives by countries of the world to promote energy conservationwhen levying corporate income tax is systematized.It is proved that the fiscal measures most often used in countries of the world for this purpose aretax credit, accelerated depreciation, tax reduction.It is determined that the benefitsof business entities from tax incentives for energy conservationare as follows: reduction in the amount of tax, decrease in the cost of industrial products, provision ofimpetus to the implementation of environmentally friendly production technologies;the benefitsof the State are environmentaladvantages, delayed effect of increase in future tax revenues.