Diderik Lund

• Graham A Davis and Diderik Lund, "Taxation and investment decisions in petroleum," The Energy Journal, vol. 39(6), 2018, pp 189-208
• Diderik Lund, "How taxes on firms reduce the risk of after-tax cash flows," Finanzarchiv, vol. 70, 2014, pp 567-598
• Diderik Lund, "Neutrality of the Resource Super Profits Tax," Australian Economic Review, vol. 44, 2011, pp. 233-238
• Diderik Lund, "Rent taxation for nonrenewable resources," Annual Review of Resource Economics, vol. 1, 2009, pp. 287-308
• Diderik Lund, "Neutral company taxation under uncertainty, with some experiences from the petroleum sectors of Norway and Denmark," R. Påhlsson (ed.), Yearbook for Nordic Tax Research 2006, Universitetsforlaget, Oslo, Norway, 2006, pp. 116–123
• Diderik Lund, "How to analyze the investment–uncertainty relationship in real option models?", Review of Financial Economics, vol. 14, 2005, pp. 311–322
• Diderik Lund and Tore Nilssen, "Cream skimming, dregs skimming, and pooling: On the dynamics of competitive screening," Geneva Papers on Risk and Insurance Theory, vol. 29, 2004, pp. 23–41
• Diderik Lund, "Petroleum tax reform proposals in Norway and Denmark," Energy Journal, vol 23, no. 4, 2002, pp. 37–56
• Diderik Lund, "Taxation, uncertainty, and the cost of equity," International Tax and Public Finance, vol. 9, no. 4, 2002, pp. 483-503
• Diderik Lund, "Rent taxation when cost monitoring is imperfect," Resource and Energy Economics, vol. 24, no. 3, June 2002, pp. 211–228
• Erik Fjærli and Diderik Lund, "The choice between owner's wages and dividends under the dual income tax," Finnish Economic Papers, vol. 14, no. 2, Autumn 2001, pp. 104 – 119
• Diderik Lund, "Petroleumsskatt — flere uavklarte spørsmål," (Petroleum taxation — further undecided issues), Økonomisk Forum, vol. 55, no. 9, 2001, pp. 34 – 40.

• Lund, Diderik (2020). Kraftig subsidiering av norsk petroleum. Samfunnsøkonomen. ISSN 1890-5250. p. 34–43. Full text in Research Archive Show summary

  Stortinget vedtok i juni 2020 midlertidige subsidier til investeringer i norsk petroleumsvirksomhet. Bakgrunnen var den lave lønnsomheten som fulgte koronapandemien og en samtidig svekkelse av prissamarbeid. Hensikten skal være å redde aktivitet, særlig i leverandørnæringen. Subsidiene vil vare i flere år, typisk til slutten av 2020-tallet. De medfører at prosjekter som er klart ulønnsomme under null skatt, vil kunne bli lønnsomme for selskapene. Samlede subsidier har vært anslått til omkring 8 milliarder kroner i samlet nåverdi så lenge ordningen varer. Men dette dreier seg om prosjekter som ville ha vært gjennomført uansett. For de prosjektene som blir gjennomført som følge av ordningen, vil subsidiene kunne bli det mangedobbelte. Noe anslag for dette har ikke vært forelagt Stortinget. Ordningen vil styrke Norges oljeavhengighet i en tid da den burde ha vært redusert. Den kan dessuten føre til en uheldig opphoping av prosjekter i tid.

• Asheim, Geir Bjarne; Fæhn, Taran; Nyborg, Karine; Greaker, Mads; Hagem, Cathrine & Harstad, Bård Gjul [Show all 9 contributors for this article] (2019). The case for a supply-side climate treaty. Science. ISSN 0036-8075. 365(6451), p. 325–327. doi: 10.1126/science.aax5011. Full text in Research Archive Show summary

  During decades of international climate policy negotiations, aiming to limit demand for fossil fuels, the stock of carbon dioxide in the atmosphere has increased considerably, and even the flow of emissions to the atmosphere continues to grow (1). To reach the Paris Agreement's goal of keeping global warming well below 2°C, substantial parts of the world's fossil fuels simply cannot be combusted and must be left in the ground (1, 2). Recent work thus suggests redirecting climate policies toward fossil fuel producers directly (3–5) by capping the flows of extraction and restricting the stocks of resources available for exploration. We synthesize key economic mechanisms that support this approach, arguing that an international treaty among fossil fuel–producing countries could (i) enhance the impact of the Paris Agreement in the presence of free riders; (ii) stimulate investment in low-carbon technology research and development (R&D); (iii) provide insurance against a failed Paris Agreement; and (iv) make carbon policies more acceptable to fossil fuel producers, thus increasing their support. None of these effects depend on universal producer participation. Moreover, such a treaty need not be costly and could in fact help reduce the costs of the required transition to a low-carbon economy.

• Davis, Graham A & Lund, Diderik (2018). Taxation and Investment Decisions in Petroleum. Energy Journal. ISSN 0195-6574. 39(6), p. 189–208. doi: 10.5547/01956574.39.6.gdav. Full text in Research Archive Show summary

  When governments apply high tax rates targeted at natural resource rent, there must be generous deductions in order to avoid investment disincentives. How generous is disputed. Based on standard finance theory and recommendations from the OECD and the IMF, the value that firms attach to future deductions depends on the risks of these, and the companies' after-tax weighted-average cost of capital cannot be applied directly. As an example, a simple model quantifies the difference between pre-tax and post-tax systematic risk when tax deductions are less risky than pre-tax cash flows. Osmundsen et al. (2015) suggest that the difference must be ignored by oil companies, since they cannot find the separate market values of tax deductions. But companies operating in different jurisdictions cannot then appreciate differences in tax systems, not even approximately, which will lead to suboptimal decisions. Tax designers may instead assume that companies have gradually adopted more sophisticated methods of investment decision making.

• Lund, Diderik & Nymoen, Ragnar (2018). Comparative statics for real options on oil: What stylized facts? The Engineering Economist. ISSN 0013-791X. 63(1), p. 54–65. doi: 10.1080/0013791X.2017.1283001. Full text in Research Archive Show summary

  An important application in the real options literature has been to investments in the oil sector. Two commonly applied "stylized facts" in such applications are tested here. One is that the correlation of the returns on oil and the stock market is positive, the other that it is invariant to changes in oil price volatility. Both are rejected in data for 1993-2008 for crude oil and the S&P 500 stock market index. Based on real options theory, consequences are pointed out. A widespread idea, that higher volatility leads to increased value and postponed investment, is not necessarily valid.

• Fæhn, Taran; Asheim, Geir Bjarne; Greaker, Mads; Hagem, Cathrine; Harstad, Bård Gjul & hoel, michael [Show all 10 contributors for this article] (2018). Parisavtalen og oljeeksporten. Samfunnsøkonomen. ISSN 1890-5250. 3, p. 39–50. Full text in Research Archive Show summary

  Bør Norge begrense sin oljeutvinning for å motvirke global oppvarming? Hvilke politiske virkemidler bør i så fall brukes? Vi oppsummerer sentrale fagøkonomiske argumenter i denne debatten i lys av de seneste årenes endringer i internasjonale klimapolitiske rammebetingelser, derunder Parisavtalen. Om Norge ønsker å bidra mer til å begrense oppvarmingen enn internasjonale avtaler forplikter oss til, kan redusert oljeutvinning være en kostnadseffektiv måte å gjøre det på. De mest nærliggende virkemidlene vil da være begrenset lisenstildeling og/eller en avgift per utvunnet enhet. Ved å initiere en internasjonal avtale om tilbudsbegrensning blant produsentland, vil norske myndigheter kunne bidra til at Parisavtalens målsettinger realiseres, selv om avtalen i seg selv skulle bli ineffektiv. En produsentlandavtale kan med andre ord virke som en forsikring.

• Nesje, Frikk & Lund, Diderik (2018). Risikojustering av kalkulasjonsrenta i samfunnsøkonomiske analysar. Samfunnsøkonomen. ISSN 1890-5250. 2018(4), p. 34–42. Full text in Research Archive
• Lund, Diderik (2014). State participation and taxation in Norwegian petroleum: Lessons for others? Energy Strategy Reviews. ISSN 2211-467X. 3(C), p. 49–54. doi: 10.1016/j.esr.2014.02.001. Full text in Research Archive Show summary

  Starting around 1970, Norway’s system of state participation and taxation in petroleum had important asymmetries, known as distortionary in tax theory. Moreover, tax rates were tailored to oil price changes. From 1986 onwards this has been reformed gradually into a stable and symmetric system, recognized as close to neutral, inducing companies to maximize pre-tax values. But the system is costly and risky for the state. If countries are unable or unwilling to bear costs and risks, they cannot implement the neutral system. Neither did Norway from the beginning. In that case a country faces important trade-offs between risk and the maximization of pre-tax value or state revenue. This may be partly circumvented by slowing the pace of licensing.

• Lund, Diderik (2014). Tvilsom markedsføring av finansielle spareprodukter. Samfunnsøkonomen. ISSN 1890-5250. 128(7), p. 4–14. Full text in Research Archive Show summary

  Salg av nye, kompliserte finansielle produkter til kunder som ikke forsto dem, bidro til finanskrisen. I flere rettssaker hevdet kundene at de var feilinformert om risikoen knyttet til produktene. Av tre slike saker i Høyesterett i 2012 endte bare den ene med at kunden, Røeggen, fikk medhold. I Fokussaken hadde 80 kunder tapt 87 prosent av investert beløp, men ingen fikk erstatning. Gjennomgangen viser flere grovt misvisende trekk ved informasjon fra banken. Flere bankansatte hadde mangelfull forståelse av produktet de solgte. Noen forslag til endret regulering blir drøftet. Krav til standardisering av informasjon kan føre til overforenkling.

• Lund, Diderik (2014). How taxes on firms reduce the risk of after-tax cash flows. FinanzArchiv / Public Finance Analysis (FA). ISSN 0015-2218. 70(4), p. 567–598. doi: 10.1628/001522114X685492. Full text in Research Archive Show summary

  Most firms use one discount rate applied to expected net after-tax cash flows. The need to adjust for differences in risk, other than leverage, is commonly neglected. There can be substantial effects of taxation on after-tax risk when there are depreciation deductions. Among the few studies of these effects, even fewer identify all effects correctly. When marginal investment is taxed together with inframarginal, the marginal beta for the Capital Asset Pricing Model differs from the average. The problems identified here imply that currently suggested tax reforms may fail. Tax neutrality results rely on firms correctly discounting for risk, in particular the risk of tax deductions.

• Lund, Diderik (2013). Kalkulasjonsrente og skatt i petroleumsvirksomhet. Samfunnsøkonomen. ISSN 1890-5250. 127(6), p. 12–23. Full text in Research Archive Show summary

  En artikkel i Samfunnsøkonomen nr. 5/2013 retter kritikk i kraftige ordelag mot forslag fra Finansdepartementet til endringer i petroleumsskatten. Blant annet beskyldes departementet for å regne feil, og for å bruke teori som er ukjent for oljeselskapene. Formålet med artikkelen min er å vise at det snarere er kritikerne som regner feil, og at teorien er kjent og anbefalt av mange fagfolk i verdsetting, i hvert fall utenfor oljeselskapene. Etter hvert vil også oljeselskapene lære nye og mer presise verdsettingsmetoder. Tar dette lang tid, kan imidlertid noen prosjekter bli skrinlagt på feilaktig grunnlag i mellomtida. Til en viss grad kan prosjekter bli overtatt av andre selskaper med andre verdsettingsmetoder.

• Lund, Diderik (2013). Taxation of nonrenewable resources. In Shogren, Jason (Eds.), Encyclopedia of Energy, Natural Resource, and Environmental Economics. Elsevier. ISSN 9780123750679. p. 224–231. Full text in Research Archive Show summary

  Early in the article there is a discussion of different justifications for resource rent taxation, and the implications of these. Three main types of resource taxes are distinguished, royalties, income taxes, and rent taxes. Their effects on companies' decisions are outlined. The relevance of Hotelling-type theory is discussed. Neutral taxation is defined. This must rely on some theory of the behavior of companies. A simple theory is presented, in which a proportional tax on non-financial cash flows, with full and immediate loss offset, is neutral. This is known as a Brown Tax. It is pointed out that the neutrality result holds under very general assumptions. Consequences of two different modifications of the Brown Tax are considered. Next, there is a discussion of the asymmetry often found in all business taxes, known as imperfect loss offset. High uncertainty and the long time lag from exploration to extraction exacerbate this problem. Financial option theory is useful to quantify these tax effects. Arguments for and against a progressive tax system are given. The problems of transfer pricing and income shifting are presented, and various methods for tax analysis are mentioned. Finally, there is a section on tax reform and political risk.

• Lund, Diderik (2012). Er petroleumsvirksomheten subsidiert? :. Samfunnsøkonomen. ISSN 1890-5250. 126(4), p. 22–31. Full text in Research Archive
• Lund, Diderik (2011). Neutrality of the Resource Super Profits Tax. Australian Economic Review. ISSN 0004-9018. 44(3), p. 233–238. doi: 10.1111/j.1467-8462.2011.00645.x. Full text in Research Archive
• Lund, Diderik (2009). Rent Taxation for Nonrenewable Resources. Annual Review of Resource Economics. ISSN 1941-1340. 1, p. 287–307. doi: 10.1146/annurev.resource.050708.144216. Full text in Research Archive Show summary

  The literature on taxation of rents from nonrenewable resources uses different theoretical assumptions and methods and a variety of empirical observations to arrive at widely diverging conclusions. Many studies use models and methods that disregard uncertainty, investigating distortionary effects of different taxes on whether, when, and how to explore for, develop, and operate resource deposits. Introducing uncertainty into the analysis opens a range of challenges and leads to results that cast doubt on the relevance of studies that neglect uncertainty. There are, however, several ways to analyze uncertainty regarding companies' behavior, resource price processes, and diversification opportunities, all with different implications for taxation. Methods developed in financial economics since the 1980s, though promising, are still not in widespread use. Additional topics covered in this review are optimal risk sharing between companies and governments, time consistency and fiscal stability, the relationship between taxes and discount rates, tax competition, and transfer pricing.

• Lund, Diderik (2006). Neutral company taxation under uncertainty, with some experiences from the petroleum sectors of Norway and Denmark. In Påhlsson, Robert (Eds.), Yearbook for Nordic Tax Research 2006. Universitetsforlaget. ISSN 9788215010533. p. 116–123. Full text in Research Archive
• Lund, Diderik (2005). How to analyze the investment-uncertainty relationship in real option models? Review of Financial Economics. ISSN 1058-3300. 14(3-4), p. 311–322. Full text in Research Archive Show summary

  The real options tradition originally predicted a decreasing relationship between uncertainty and investment, through the positive effect of higher uncertainty on the trigger level for revenue relative to costs. An opposing effect on the probability of reaching the level has been identified, yielding a total effect with ambiguous sign. This paper makes three points. The "opposing" effect is not always opposing. Systematic risk cannot generally be assumed to be increasing with volatility. A probability is not the best measure of investment. The sign of the total effect is again ambiguous. This ambiguity is illustrated, depending on specification of model and parameters.

• Lund, Diderik & Nilssen, Tore (2004). Cream skimming, dregs skimming, and pooling: On the dynamics of competitive screening. The Geneva Papers on Risk and Insurance Theory. ISSN 0926-4957. 29, p. 23–41. doi: 10.1023/GEPA.0000032564.19797.21. Full text in Research Archive
• Lund, Diderik (2002). Petroleum tax reform proposals in Norway and Denmark. Energy Journal. ISSN 0195-6574. 23(4), p. 37–56. Full text in Research Archive Show summary

  During the past two years similar petroleum tax reforms have been proposed in Norway and Denmark. Both were based on results on neutral taxation derived by Boadway and Bruce (1984) and Fane (1987). Main features of the proposals are presented, and important problems of implementation are highlighted. Topics for further research are pointed out. While the risk characteristics of tax deductions caused major disagreements between experts and oil companies, the after-tax cost of capital for risk free cash flows is a less clearly resolved question within the economics literature. Another topic for disagreement is value additivity, disputed by the companies.

• Lund, Diderik (2002). Taxation, uncertainty, and the cost of equity. International Tax and Public Finance. ISSN 0927-5940. 9(4), p. 483–503. Full text in Research Archive Show summary

  Traditionally the pre-tax cost of capital is a function of the interest rate and the tax system. However, uncertainty implies that the market's required return is no single interest rate, but depends on risk. Different tax systems split risk differently between firm and government. Thus the required expected return after corporate taxes depends on the tax system. Expressions for this are derived, based on a CAPM-type model. The weighted average cost of capital is decreasing in the tax rate, even for fully equity financed projects. This effect can be substantial, but is neglected in much of the literature.

• Lund, Diderik (2002). Rent taxation when cost monitoring is imperfect. Resource and Energy Economics. ISSN 0928-7655. 24(3), p. 211–228. doi: 10.1016/S0928-7655(01)00053-7. Full text in Research Archive Show summary

  While rent taxation in some theories is neutral, and the tax rate could be set to one hundred percent to minimize the need for distortionary taxes, this does not occur in practice. An important reason for this is the transfer incentives that would result. When cost transfers can only be imperfectly monitored, it is optimal under some conditions to combine a tax on gross revenue with a rent tax. This contributes to explaining the frequent occurrence of gross revenue taxation in actual rent tax systems, and the frequently observed tailoring of rent tax systems in response to output price changes.

• Fjærli, Erik & Lund, Diderik (2001). The choice between owner's wages and dividends under the dual income tax. Finnish economic papers. ISSN 0784-5197. 14(2), p. 104–119. Full text in Research Archive Show summary

  Tax-motivated shifting of income between different tax bases erodes tax revenues, confuses income statistics, and makes the effects of tax reforms unpredictable. Few studies have been able to use micro data to investigate this phenomenon. Using a rather unique data set, this study shows that the choice of type of payout from corporations to owners is strongly, but not uniquely, motivated by taxes. There are indications that the personal tax system is more clearly perceived by the owners than is the system of corporate taxes and regulations, and that own wage payments are motivated by rights to social security benefits.

• Lund, Diderik (2001). Petroleumsskatt - flere uavklarte spørsmål. Økonomisk forum. ISSN 1502-6108. 55(9), p. 34–40. Full text in Research Archive Show summary

  Forslagene om reformer i skatt på petroleumsutvinning, NOU (2000:18), tok sikte på at skattesystemet skulle være nøytralt etter standard teori. Oljeselskapene møtte forslagene med mange motforestillinger. Noen drøftes her. Innvendingen om at selskapene bruker andre metoder for investeringsanalyser enn de som forslagene bygger på, reiser spørsmålet om hvorfor selskapene ikke tilegner seg nyere teori. Forutsetningen om verdiadditivitet står sterkt i teorien. Eventuelle avvik fra denne må begrunnes nøye. Når det gjelder selskapenes vilje til å investere i Norge, når de også har muligheter i andre land, forutsetter kritikken uten forklaring at de ikke kan gjøre begge deler.

• Lund, Diderik (2001). Under different international agreements: Can a small nation gain from introducing a carbon tax early? In Ulph, Alistair (Eds.), Environmental Policy, International Agreements, and International Trade. Oxford University Press, Oxford, United Kingdom. ISSN 9780198293293. p. 209–230. Full text in Research Archive Show summary

  Some authors and authorities have proposed that a small nation could gain from introducing a carbon tax domestically, given that a binding international agreement would come into effect at a later stage. This gain would not be due to the environmental impact, which is tiny and can be disregarded. Instead it is thought that the domestic private sector would redirect its research and development efforts, thus preparing for the future binding agreement. The idea is investigated in a theoretical model, distinguished by R&D going in two different directions, one environment friendly and one non-friendly. R&D has positive externalities. Compared with Lund (1994), the model is now expanded to consider different international agreements. One conclusion is that the agreement should demand payment to an international institution, at least for the marginal emission. If not, the national government would want to counteract the agreement before it becomes effective.

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• Lund, Diderik & Rosendahl, Knut Einar (2025). Norgespris, usikkerhet og etterspørsel etter strømsparing. Samfunnsøkonomen. ISSN 1890-5250. 2025(2), p. 5–8. doi: https:/www.samfunnsokonomen.no/aktuell-kommentar/norgespris-usikkerhet-og-ettersporsel-etter-stromsparing/. Full text in Research Archive
• Lund, Diderik & Rosendahl, Knut Einar (2025). Norgespris – hva slags avveininger, Stoltenberg? doi: https:/www.dn.no/innlegg/norgespris/energi/politikk/norgespris-hva-slags-avveininger-stoltenberg/2-1-1821329. Full text in Research Archive
• Holtsmark, Katinka Kristine; Lund, Diderik & Rosendahl, Knut Einar (2025). Oljeselskapene betaler mye skatt, ja, men skattepakken innebærer subsidier. doi: https:/www.dn.no/innlegg/oljeselskapene-betaler-mye-skatt-ja-men-skattepakken-innebarer-subsidier/2-1-1827454. Full text in Research Archive
• Holtsmark, Katinka Kristine; Lund, Diderik & Rosendahl, Knut Einar (2025). Oljeskattepakken flytter overskudd fra fellesskapet til private. doi: https:/www.dn.no/innlegg/oljeskattepakken-flytter-overskudd-fra-fellesskapet-til-private/2-1-1830120. Full text in Research Archive
• Lund, Diderik & Rosendahl, Knut Einar (2025). Ingen alternativ til Norgespris? Virkelig? doi: https:/www.dn.no/innlegg/strompris/norgespris/energi/ingen-alternativ-til-norgespris-virkelig/2-1-1835202. Full text in Research Archive
• Lund, Diderik & Rosendahl, Knut Einar (2025). Norgespris oppmuntrer til økt strømbruk og bidrar til økte forskjeller. doi: https:/www.aftenposten.no/meninger/debatt/i/algX4d/norgespris-oppmuntrer-til-oekt-stroembruk-og-bidrar-til-oekte-forskjeller. Full text in Research Archive
• Lund, Diderik & Rosendahl, Knut Einar (2025). Strømstøtte som fordeling av grunnrente. doi: https:/www.klimastiftelsen.no/publikasjoner/stromstotte-som-fordeling-av-grunnrente. Full text in Research Archive
• Fæhn, Taran; Hagem, Cathrine; Lund, Diderik & Rosendahl, Knut Einar (2022). Fossil utvinning må reduseres. Dagsavisen. ISSN 1503-2892. Full text in Research Archive
• Lund, Diderik & Rosendahl, Knut Einar (2022). Grunnrente til folket. Full text in Research Archive
• Rosendahl, Knut Einar & Lund, Diderik (2022). Oljeskattepakken gir kraftig subsidiering fortsatt. Full text in Research Archive
• Lund, Diderik & Rosendahl, Knut Einar (2021). Oljeskatteforslaget er et steg i riktig retning. Dagens næringsliv. ISSN 0803-9372. Full text in Research Archive
• Greaker, Mads; Hoel, Michael; Lund, Diderik; Rosendahl, Knut Einar & Wulfsberg, Fredrik (2021). Nåverdi selvsagt ikke bare pedagogikk. Full text in Research Archive
• Lund, Diderik & Rosendahl, Knut Einar (2021). Mindre norsk petroleum gir lavere utslipp. Full text in Research Archive
• Greaker, Mads; Hoel, Michael; Lund, Diderik; Rosendahl, Knut Einar & Wulfsberg, Fredrik (2021). Også usikre tall må diskonteres. Dagens næringsliv. ISSN 0803-9372. Full text in Research Archive
• Asheim, Geir B.; Fæhn, Taran; Golombek, Rolf; Greaker, Mads; Hagem, Cathrine & Harstad, Bård [Show all 12 contributors for this article] (2021). Norsk olje-politikk kan bidra for klimaet. p. 28–29. Full text in Research Archive
• Lund, Diderik & Rosendahl, Knut Einar (2020). Oljeskattforslaget er uansett kraftig subsidiering. Full text in Research Archive
• Lund, Diderik & Rosendahl, Knut Einar (2020). Oljenæringen ber om kraftig subsidiering - se regnestykket som viser hvor mye. Full text in Research Archive
• Gurría, Angel; Tsekeris, Dimitris; Grigoriou, Takis; Timmermans, Frans; Trio, Wendel & Bråthen, Svein [Show all 8 contributors for this article] (2020). Milliarder i fossilstøtte står i veien for grønt skifte i Europa. [Internet]. energiogklima.no. Full text in Research Archive
• Lund, Diderik & Rosendahl, Knut Einar (2020). Skatteforslaget gir subsidiering av olje, uten tvil. Full text in Research Archive
• Lund, Diderik & Rosendahl, Knut Einar (2020). Hvorfor skal skatten favorisere olje og gass? Full text in Research Archive
• Asheim, Geir Bjarne; Fæhn, Taran; Nyborg, Karine; Greaker, Mads; Hagem, Cathrine & Harstad, Bård Gjul [Show all 9 contributors for this article] (2020). Arguments for a new supply-side climate treaty. EAERE Magazine. Full text in Research Archive
• Asheim, Geir Bjarne; Fæhn, Taran; Nyborg, Karine; Greaker, Mads; Harstad, Bård Gjul & Hagem, Cathrine [Show all 9 contributors for this article] (2020). Strengthening the Paris Agreement by supply-side climate policies. Atlas of Science. Full text in Research Archive
• Asheim, Geir Bjarne; Christiansen, Vidar; Hoel, Michael; Lund, Diderik; Mehlum, Halvor & Nyborg, Karine [Show all 8 contributors for this article] (2020). Subsidier til oljenæringen gir ikke omstilling. Full text in Research Archive
• Lund, Diderik & Nyborg, Karine (2019). Hvordan begrenses oljeutvinningen best? Full text in Research Archive
• Asheim, Geir Bjarne; Fæhn, Taran; Nyborg, Karine; Greaker, Mads; Hagem, Cathrine & Harstad, Bård Gjul [Show all 9 contributors for this article] (2019). En ny, internasjonal klimaavtale bør på plass. Full text in Research Archive
• Lund, Diderik (2019). Kalkulasjonsrente og usikkerhet. Full text in Research Archive
• Davis, Graham A & Lund, Diderik (2018). Taxation and Investment Decisions in Petroleum. Full text in Research Archive Show summary

  When governments apply high tax rates targeted at natural resource rent, there must be generous deductions in order to avoid investment disincentives. How generous is disputed. Based on standard finance theory and recommendations from the OECD and the IMF, the value of future deductions depends on the risks of these, and the companies’ after-tax weighted-average cost of capital cannot be applied directly. As an example, a simple model quantifies the difference between pre-tax and post-tax systematic risk when tax deductions are less risky than pre-tax cash flows. Osmundsen et al. (2015) suggest that the difference must be ignored by oil companies, since they cannot find the separate market values of tax deductions. But companies operating in different jurisdictions cannot then appreciate differences in tax systems, not even approximately, which will lead to suboptimal decisions. Tax designers may instead assume that companies gradually adopt more adequate methods of investment decision making.

• Lund, Diderik (2017). Current issues in taxation of non-renewable natural resources. Full text in Research Archive
• Lund, Diderik & Nyborg, Karine (2017). Behold petroleumsskatten! Full text in Research Archive
• Lund, Diderik (2016). Er fradrag for investeringer for gode? Full text in Research Archive
• Lund, Diderik (2016). Optimal resource rent taxation when nations are credit constrained. Full text in Research Archive Show summary

  The Resource Rent Tax suggested by Garnaut and Clunies Ross (1975) has been influential in resource rich countries and in academic literature. Several authors show that it distorts investments through asymmetric treatment of profits and losses. Neutrality can only be achieved if authorities commit to treating these symmetrically, guaranteeing loss offset through payouts if necessary. Risks are substantial, both in output (technology, geology) and (output and factor) prices. Many nations will be unable or unwilling to take risks involved in such guarantees. We analyze optimal rent taxation in this situation, maximizing tax revenue subject to a constraint of no loss offset.

• Lund, Diderik & Nymoen, Ragnar (2015). Comparative statics for real options on oil: What stylized facts to use? Full text in Research Archive Show summary

  An important application in the real options literature has been to investments in the oil sector. Two commonly applied “stylized facts” in such applications are tested here. One is that the correlation of the returns on oil and the stock market is positive, the other that it is invariant to changes in oil price volatility. Both are rejected in data for 1993–2008 for crude oil and the S&P 500 stock market index. Based on real options theory, consequences are pointed out. Higher volatility need not imply increased value and postponed investment.

• Lund, Diderik (2015). Optimal resource rent taxation when nations are credit constrained. Full text in Research Archive Show summary

  The Resource Rent Tax suggested by Garnaut and Clunies Ross (1975) has been influential in resource rich countries and in academic literature. Several authors show that it distorts investments through asymmetric treatment of profits and losses. Neutrality can only be achieved if authorities commit to treating these symmetrically, guaranteeing loss offset through payouts if necessary. Risks are substantial, both in output (technology, geology) and (output and factor) prices. Many nations will be unable or unwilling to take risks involved in such guarantees. We analyze optimal rent taxation in this situation, maximizing tax revenue subject to a constraint of no loss offset.

• Jortveit, Anne Karin & Lund, Diderik (2015). Oljenæring i særstilling. Dybdeintervju. [Journal]. Rapport fra Norsk Klimastiftelse. Full text in Research Archive Show summary

  • Oljeselskapenes mulighet til å trekke fra renteutgifter ved beregningen av særskatt, er det mest uheldig ved det norske petroleumsskattesystemet. • Mener det samme nå som i 2013, at friinntekten er for generøs. • Ingen god begrunnelse for ny skattefordel. • Oljenæringen er i en særstilling på grunn av høy skatt og lang ledetid. • Vanskelig å sammenlikne oljenæringen med fornybarnæringen. • For klima og miljø er det viktigere å utlyse færre lisenser enn å endre oljeskattesystemet.

• Lund, Diderik (2014). Avkastningskrav og skatt. Full text in Research Archive
• Lund, Diderik (2014). Rente i aksjonærmodellen og ACE-modellen. Full text in Research Archive
• Lund, Diderik & Nymoen, Ragnar (2014). Comparative statics for real options on oil: What stylized facts to use? Full text in Research Archive
• Lund, Diderik & Nymoen, Ragnar (2013). A theoretical and empirical analysis of invariance assumptions in comparative statics for real options on oil. Full text in Research Archive
• Lund, Diderik (2013). How taxes on firms reduce the risk of after-tax cash flows. Full text in Research Archive
• Lund, Diderik (2013). How taxes on firms reduce the risk of after-tax cash flows. Full text in Research Archive Show summary

  Most firms use one discount rate applied to expected net after-tax cash flows. The need to adjust for differences in risk, other than leverage, is commonly neglected. There can be substantial effects of taxation on after-tax risk when there are depreciation deductions. Among the few studies of these effects, even fewer identify all effects correctly. When marginal investment is taxed together with inframarginal, marginal CAPM beta differs from average. The problems identified here imply that currently suggested tax reforms may fail. Tax neutrality results rely on firms correctly discounting for risk, in particular the risk of tax deductions.

• Lund, Diderik (2013). Kalkulasjonsrente og skatt i petroleumsvirksomhet. Full text in Research Archive
• Lund, Diderik (2013). Sammenlikning av skattesystemer i petroleumsvirksomhet. Full text in Research Archive
• Lund, Diderik (2013). Bedre omtrent riktig enn nøyaktig galt :. Samfunnsøkonomen. ISSN 1890-5250. 127(9), p. 14–18. Full text in Research Archive Show summary

  I Samfunnsøkonomen nr. 8/2013 svarer Osmundsen, Johnsen og Emhjellen (OJE) (2013) på Lund (2013a), som i sin tur var et svar på Osmundsen og Johnsen (2013). Jeg skal her først diskutere hvilke holdepunkter vi har for å finne de relevante kalkulasjonsrentene. Deretter skal jeg drøfte hvordan staten bør forholde seg til oljeselskapenes påstander om at friinntekten må være rausere fordi de har høyere avkastningskrav enn det staten har lagt til grunn.

• Lund, Diderik (2013). How taxes on firms reduce the risk of after-tax cash flows. Full text in Research Archive Show summary

  Most firms make decisions based on one discount rate applied to expected net after tax cash flows. The need to adjust for differences in risk, other than leverage, is most often neglected. One source of risk differences is the tax system. Even for fully equity-financed firms there can be substantial effects of taxation on after-tax risk when there are depreciation deductions. Among the few studies of these effects, even fewer identify all effects correctly. Some claim to characterize the cost of capital, but fail to identify the marginal investment. When this is taxed together with inframarginal investment, marginal beta differs from average. To find asset betas, observed equity betas should not only be unlevered, but also “unaveraged” and “untaxed.” The problems identified here imply that currently suggested tax reforms may fail. Tax neutrality results rely on firms correctly discounting for risk, in particular the risk of tax deductions.

• Lund, Diderik (2013). An economist's view. Full text in Research Archive
• Lund, Diderik (2012). Erfaringer med rammevilkår for petroleumsproduksjon i Norge. Full text in Research Archive
• Lund, Diderik (2012). Sammensatte finansielle produkter - uforståelige eller nyttige? Full text in Research Archive Show summary

  Etter finanskrisen i 2008 har investorer opplevd store tap på finansielle produkter de trolig ikke forsto. Domstolene tar stilling til om investorene selv eller de som har solgt produktene, er ansvarlige for manglende forståelse og påfølgende tap. Vi skal se på hvordan produktene er sammensatt, hvilken risiko de innebærer, og om de kan være nyttige for noe eller noen. Vi skal også se på den informasjonen som har vært gitt.

• Lund, Diderik (2011). Marginal vesus average beta of equity, and the risk of depreciation tax shields. Full text in Research Archive
• Lund, Diderik (2011). Neutrality of a Resource Super Profits Tax. Full text in Research Archive
• Lund, Diderik (2010). Samfunnsøkonomiske betraktninger rundt regulering av petroleumsvirksomheten. Full text in Research Archive
• Lund, Diderik (2010). Marginal versus average beta of equity, and the risk of depreciation tax shields. Full text in Research Archive
• Lund, Diderik (2009). Rent taxation for non-renewable resources. Full text in Research Archive
• Lund, Diderik (2009). Rent taxation for non-renewable resources. Full text in Research Archive
• Lund, Diderik (2008). Rent taxation for nonrenewable resources. Full text in Research Archive Show summary

  The literature on taxation of rents from nonrenewable resources uses different theoretical assumptions and methods and a variety of empirical observations to arrive at widely diverging conclusions. Many studies use models and methods which disregard uncertainty, investigating distortionary effects of different taxes on whether, when, and how to explore for, develop and operate resource deposits. Introducing uncertainty into the analysis opens a range of challenges, and leads to results which cast doubt upon the relevance of studies which neglect uncertainty. There are, however, several ways to analyze uncertainty, regarding companies' behavior, resource price processes, and diversification opportunities, all with different implications for taxation. Methods developed in financial economics since the 1980's are promising, but still not in widespread use. Some more specific topics covered in this review are optimal risk sharing between companies and governments, time consistency and fiscal stability, the relationship between taxes and discount rates, and transfer pricing.

• Lund, Diderik (2008). An analytical model of required returns to equity under taxation with imperfect loss offset. Full text in Research Archive
• Lund, Diderik (2004). An Analytical Model of Required Returns to Equity under Taxation with Imperfect Loss Offset. Full text in Research Archive
• Lund, Diderik (2004). Depreciation, taxes and the cost of capital. Full text in Research Archive
• Lund, Diderik (2003). Valuation, leverage and the cost of capital in the case of depreciabel assets: Revisited. Full text in Research Archive Show summary

  Levy and Arditti (1973) introduced depreciable assets into the Modigliani and Miller (1958) model, and analyzed the implications for the cost of capital. Assuming that the firm reinvests indefinitely to maintain a constant expected cash flow, they found that depreciation increases the cost of capital before and after tax. Most of their assumptions are maintained. However, commitment to perpetual reinvestment is in most cases not a reasonable assumption. Without it, depreciation decreases the cost of capital before and after tax. The effect of depreciation is less in absolute value than in Levy and Arditti, but not insignificant.

• Lund, Diderik (2003). Taxation and systematic risk under decreasing returns to scale. Full text in Research Archive
• Lund, Diderik (2002). Rent taxation when cost monitoring is imperfect. Full text in Research Archive Show summary

  While rent taxation in some theories is neutral, and the tax rate could be set to one hundred percent to minimize the need for distortionary taxes, this does not occur in practice. An important reason for this is the transfer incentives that would result. When cost transfers can only be imperfectly monitored, it is optimal under some conditions to combine a tax on gross revenue with a rent tax. This contributes to explaining the frequent occurrence of gross revenue taxation in actual rent tax systems, and the frequently observed tailoring of rent tax systems in response to output price changes.

• Lund, Diderik (2002). Petroleum tax reform in Scandinavia. Full text in Research Archive Show summary

  During the past two years similar petroleum tax reforms were proposed in Norway and Denmark. Both were based on results on neutral taxation derived by Boadway and Bruce (1984) and Fane (1987). Main features of the proposals are presented, and important problems of implementation are highlighted. Topics for further research are pointed out. While the risk characteristics of tax deductions caused major disagreements between experts and oil companies, the after-tax cost of capital for risk free cash flows is a less clearly resolved question within the economics literature. Another topic for disagreement is value additivity, disputed by the companies.

• Lund, Diderik (2002). Petroleum tax reform in Scandinavia. Full text in Research Archive Show summary

  During the past two years similar petroleum tax reforms were proposed in Norway and Denmark. Both were based on results on neutral taxation derived by Boadway and Bruce (1984) and Fane (1987). Main features of the proposals are presented, and important problems of implementation are highlighted. Topics for further research are pointed out. While the risk characteristics of tax deductions caused major disagreements between experts and oil companies, the after-tax cost of capital for risk free cash flows is a less clearly resolved question within the economics literature. Another topic for disagreement is value additivity, disputed by the companies.

• Lund, Diderik (2001). Petroleum tax reform in Scandinavia. Full text in Research Archive Show summary

  During the past two years similar petroleum tax reforms were proposed in Norway and Denmark. Both were based on results on neutral taxation derived by Boadway and Bruce (1984) and Fane (1987). Main features of the proposals are presented, and important problems of implementation are highlighted. Topics for further research are pointed out. While the risk characteristics of tax deductions caused major disagreements between experts and oil companies, the after-tax cost of capital for risk free cash flows is a less clearly resolved question within the economics literature. Another topic for disagreement is value additivity, disputed by the companies.

• Lund, Diderik (2001). Taxation, uncertainty and the cost of equity for a multinational firm. Full text in Research Archive Show summary

  From a CAPM-type model the cost of equity is derived for a firm operating under various foreign tax systems. The firm´s shares are traded in a market which is unaffected by these systems. The cost of capital depends on the foreign tax system, even for fully equity financed projects. This is neglected in much of the literature. For a corporate income tax the main factor which reduces the cost of equity is the depreciation deductions. Compared to a neutral cash flow tax, this reduces the cost of equity because it acts as a loan from the firm to the government.

• Lund, Diderik (2001). Taxation, uncertainty, and the cost of equity for a multinational firm. Full text in Research Archive Show summary

  From a CAPM-type model the cost of equity is derived for a firm operating under various foreign tax systems. The firm´s shares are traded in a market which is unaffected by these systems. The cost of capital depends on the foreign tax system, even for fully equity financed projects. This is neglected in much of the literature. For a corporate income tax the main factor which reduces the cost of equity is the depreciation deductions. Compared to a neutral cash flow tax, this reduces the cost of equity because it acts as a loan from the firm to the government.

• Lund, Diderik (2001). Taxation, uncertainty, and the cost of equity for a multinational firm. Full text in Research Archive Show summary

  From a CAPM-type model the cost of equity is derived for a firm operating under various foreign tax systems. The firm´s shares are traded in a market which is unaffected by these systems. The cost of capital depends on the foreign tax system, even for fully equity financed projects. This is neglected in much of the literature. For a corporate income tax the main factor which reduces the cost of equity is the depreciation deductions. Compared to a neutral cash flow tax, this reduces the cost of equity because it acts as a loan from the firm to the government.

• Lund, Diderik (2001). Taxation, uncertainty, and the cost of equity for a multinational firm. Full text in Research Archive Show summary

  From a CAPM-type model the cost of equity is derived for a firm operating under various foreign tax systems. The firm´s shares are traded in a market which is unaffected by these systems. The cost of capital depends on the foreign tax system, even for fully equity financed projects. This is neglected in much of the literature. For a corporate income tax the main factor which reduces the cost of equity is the depreciation deductions. Compared to a neutral cash flow tax, this reduces the cost of equity because it acts as a loan from the firm to the government.

• Lund, Diderik (2001). Taxation, uncertainty, and the cost of equity for a multinational firm. Full text in Research Archive Show summary

  From a CAPM-type model the cost of equity is derived for a firm operating under various corporate tax systems, e.g., abroad or in particular sectors of an economy. The firm's shares are traded in a market which is unaffected by these systems. The cost of capital depends on the tax systems in question, even for fully equity financed projects. This is neglected in much of the literature and practice based on the weighted average cost of capital. For a corporate income tax the main factor which reduces the cost of equity is the depreciation deductions. Compared with a neutral cash flow tax, these reduce the cost of equity because they act risk-wise as a loan from the firm to the government. For a given depreciation schedule the cost of equity is a decreasing function of the corporate tax rate. Under some realistic circumstances the result is stronger: The beta of equity is proportional to one minus the tax rate. The results carry over from two-period to multi-period models. They are modified, but not removed, if the tax value of depreciation deductions is risky. This can be modelled using option valuation techniques. The results are relevant for capital budgeting in firms which face widely different depreciation schedules or corporate tax rates. They are also relevant for discussions of tax reform, and numerically if one wants to apply capital market data in capital budgeting. Compared with previous studies, the method is improved by solving for the after-tax marginal project. Compared with Levy and Arditti (1973) it is argued that their assumption of a perpetual commitment to reinvestment is unrealistic.

• Lund, Diderik (2001). Taxation, uncertainty, and the cost of equity for a multinational firm. Full text in Research Archive Show summary

  From a CAPM-type model the cost of equity is derived for a firm operating under various corporate tax systems, e.g., abroad or in particular sectors of an economy. The firm's shares are traded in a market which is unaffected by these systems. The cost of capital depends on the tax systems in question, even for fully equity financed projects. This is neglected in much of the literature and practice based on the weighted average cost of capital. For a corporate income tax the main factor which reduces the cost of equity is the depreciation deductions. Compared with a neutral cash flow tax, these reduce the cost of equity because they act risk-wise as a loan from the firm to the government. For a given depreciation schedule the cost of equity is a decreasing function of the corporate tax rate. Under some realistic circumstances the result is stronger: The beta of equity is proportional to one minus the tax rate. The results carry over from two-period to multi-period models. They are modified, but not removed, if the tax value of depreciation deductions is risky. This can be modelled using option valuation techniques. The results are relevant for capital budgeting in firms which face widely different depreciation schedules or corporate tax rates. They are also relevant for discussions of tax reform, and numerically if one wants to apply capital market data in capital budgeting. Compared with previous studies, the method is improved by solving for the after-tax marginal project. Compared with Levy and Arditti (1973) it is argued that their assumption of a perpetual commitment to reinvestment is unrealistic.

• Lund, Diderik (2001). Taxation, uncertainty, and the cost of equity for a multinational firm. Full text in Research Archive Show summary

  From a CAPM-type model the cost of equity is derived for a firm operating under various corporate tax systems, e.g., abroad or in particular sectors of an economy. The firm's shares are traded in a market which is unaffected by these systems. The cost of capital depends on the tax systems in question, even for fully equity financed projects. This is neglected in much of the literature and practice based on the weighted average cost of capital. For a corporate income tax the main factor which reduces the cost of equity is the depreciation deductions. Compared with a neutral cash flow tax, these reduce the cost of equity because they act risk-wise as a loan from the firm to the government. For a given depreciation schedule the cost of equity is a decreasing function of the corporate tax rate. Under some realistic circumstances the result is stronger: The beta of equity is proportional to one minus the tax rate. The results carry over from two-period to multi-period models. They are modified, but not removed, if the tax value of depreciation deductions is risky. This can be modelled using option valuation techniques. The results are relevant for capital budgeting in firms which face widely different depreciation schedules or corporate tax rates. They are also relevant for discussions of tax reform, and numerically if one wants to apply capital market data in capital budgeting. Compared with previous studies, the method is improved by solving for the after-tax marginal project. Compared with Levy and Arditti (1973) it is argued that their assumption of a perpetual commitment to reinvestment is unrealistic.

• Halvorsen, Kristin; Helgesen, Vidar; Arnstad, Ada Johanna; Bjørlo, Alfred; Bjørnland, Hilde C & Gjørv, Alexandra Bech [Show all 15 contributors for this article] (2020). Raskere klimaomstilling. Redusert risiko. Ny politikk for Norge i en verden som når Parismålene. Rapport fra klimaomstillingsutvalget. Regjeringen. Full text in Research Archive
• Lund, Diderik (2018). Increasing resource rent taxation when the corporate income tax is reduced? Universitetet i Oslo. Full text in Research Archive Show summary

  Under international tax competition, corporate income tax rates are predicted to decrease, and the tax burden will shift onto immobile factors. This case study considers tax changes that illustrate the predictions for Norway 2012–2018. Petroleum rent was taxed at high rates in 2012, and while corporate income tax rates were reduced in four steps, the marginal tax on rent was kept constant. The four steps are analyzed in light of the tax burden shift predicted by theory, and possible intentions of the government. The tax on petroleum rent has not been increased. Government intentions seem to have been shifting.

• Lund, Diderik (2003). Valuation, leverage and the cost of capital in the case of depreciable assets: Revisited. Copenhagen Business School, Department of Economics. Full text in Research Archive Show summary

  Levy and Arditti (1973) introduced depreciable assets into the Modigliani and Miller (1958) model, and analyzed the implications for the cost of capital. Assuming that the firm reinvests indefinitely to maintain a constant expected cash flow, they found that depreciation increases the cost of capital before and after tax. Most of their assumptions are maintained. However, commitment to perpetual reinvestment is in most cases not a reasonable assumption. Without it, depreciation decreases the cost of capital before and after tax. The effect of depreciation is less in absolute value than in Levy and Arditti, but not insignificant.

• Lund, Diderik (2003). Taxation and systematic risk under decreasing returns to scale. Copenhagen Business School, Department of Economics. Full text in Research Archive Show summary

  Lund (2002a) showed in a CAPM-type model how tax depreciation schedules affect required expected returns after taxes. Even without leverage higher tax rates implied lower betas when tax deductions were risk free. Here they are risky, and marginal investment is taxed together with inframarginal in an analytical model of decreasing returns. With imperfect loss offset tax claims are analogous to call options. The beta of equity is still decreasing in the tax rate, but increasing in the underlying volatility. The results are important if market data are used to infer required expected returns, and in discussions of tax design.

• Lund, Diderik (2003). How to analyze the investment-uncertainty relationship in real option models. University of Copenhagen, Institute of Economics, Economic Policy Research Unit. Full text in Research Archive Show summary

  The real options tradition originally predicted a decreasing relationship between uncertainty and investment, through the positive effect of higher uncertainty on the trigger level for revenue relative to costs. An opposing effect on the probability of reaching the level has been identified, yielding a total effect with ambiguous sign. This paper makes three points. The �opposing� effect is not always opposing. Systematic risk cannot generally be assumed to increase with volatility. A probability is not the best measure of investment. The sign of the total effect is again ambiguous. This ambiguity is illustrated, depending on specification of model and parameters.

• Lund, Diderik (2001). Taxation, uncertainty, and the cost of equity for a multinational firm. Universitetet i Oslo. Full text in Research Archive Show summary

  From a CAPM-type model the cost of equity is derived for a …rm operating under various foreign tax systems. The …rm’s shares are traded in a market which is una¤ected by these systems. The cost of capital depends on the foreign tax system, even for fully equity …nanced projects. This is neglected in much of the literature. For a corporate income tax the main factor which reduces the cost of equity is the depreciation deductions. Compared with a neutral cash ‡ow tax, this reduces the cost of equity because it acts as a loan from the …rm to the government.

• Lund, Diderik & Nilssen, Tore (2000). Cream skimming, dregs skimming, and pooling: On the dynamics of competitive screening. Department of Economics, University of Oslo, Norway. Full text in Research Archive Show summary

  We discuss the prevalence of pooling equilibria in a two-period model of an insurance market with asymmetric information. We solve the model numerically. In addition to reporting cases where a pooling equilibrium exists, we pay attention to why, in the case of non-existence of a pooling equilibrium, this is so. In addition to the phenomenon of cream skimming emphasized in earlier literature, we here point to the importance of the opposite: dregs skimming, whereby high-risk consumers are profitably detracted from the candidate pooling contract.

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