Table of Contents

Carbon Pricing

Carbon Pricing

Design, Experiences and Issues

Critical Issues in Environmental Taxation series

Edited by Larry Kreiser, Mikael S. Andersen, Birgitte E. Olsen, Stefan Speck, Janet E. Milne and Hope Ashiabor

Carbon Pricing reflects upon and further develops the ongoing and worthwhile global debate into how to design carbon pricing, and how to utilize the financial proceeds in the best possible way for society. The world has recently witnessed a significant downward adjustment in fossil fuel prices, which has negative implications for the future of our environment. In light of these negative developments, it is important to understand the benefits of environmental sustainability through well-documented research. This discerning book considers the design of carbon taxes and examines the consequential outcomes of different taxation compositions as regulatory instruments. Expert contributors assess a variety of national experiences to provide an empirical insight into the use of carbon taxes, emissions trading, energy taxes and excise taxes. The overarching discussion concludes that successful policies used by some countries can be implemented in other jurisdictions with minimum new research and experimentation.

Chapter 13: Motivating environmental tax reform through coalitions of like-minded countries

Sirini Withana and Patrick ten Brink

Subjects: economics and finance, economics of innovation, environment, energy policy and regulation, environmental law, law - academic, environmental law, tax law and fiscal policy, politics and public policy, environmental politics and policy


There is growing use of environmental taxes in Europe and a new momentum behind the environmental tax reform (ETR) agenda. What began as an exercise among a small vanguard of European countries twenty five years ago has gradually expanded to encompass a wider set of countries across the globe. Several plans are underway to introduce new environmental taxes or amend existing systems, either as part of a broader package of fiscal reform or as individual proposals. Some recent initiatives have been in response to fiscal necessities, while others seek to support wider environmental, economic and social objectives. ETR has attracted increasing attention at EU level, for example appearing in policy discussions on climate change; and globally, for example in discussions on reforming incentives harmful to biodiversity (Oosterhuis and ten Brink, 2014). Environmental taxes are considered a useful and important part of the policy mix. When carefully designed, such instruments can provide incentives to encourage dynamic innovation, change the business case for investment, and inform consumer choice, thus helping to deliver economic (for example, revenue, innovation, employment), social (for example, health, income distribution, affordability) and environmental (for example, resource efficiency, energy security, pollution mitigation) benefits. Impacts depend on several factors including design (such as point of application, breadth of coverage), level (such as rate applied, revisions over time), implementation (such as exemptions granted, associated conditionalities, evolution over time), and use of revenues.

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