Environmental Taxation and Climate Change
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Environmental Taxation and Climate Change

Achieving Environmental Sustainability through Fiscal Policy

Edited by Larry Kreiser, Julsuchada Sirisom, Hope Ashiabor and Janet E. Milne

Containing an authoritative set of original essays, Environmental Taxation and Climate Change provides fresh insights and analysis on how environmental sustainability can be achieved through fiscal policy. Written by distinguished environmental taxation scholars from around the world, this timely volume covers a range of hotly debated subjects including carbon related taxation in OECD countries, implications of environmental tax reforms, innovative environmental taxation and behavioural strategies, as well as many other relevant topics.
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Chapter 1: Carbon-related Taxation in OECD Countries and Interactions between Policy Instruments

Nils Axel Braathen


Nils Axel Braathen1 INTRODUCTION The use of economic instruments to address greenhouse gas emissions has widened in recent years, for example, in the form of ‘carbon taxes’, CO2-related tax rate differentiation of motor vehicle taxes and emission trading systems. As climate change is a global problem, ideally all sources of emissions of greenhouse gases in general, and CO2 in particular, ought to face a similar incentive at the margin to abate emissions. This chapter discusses in Section I current use of carbon-related taxation in Organisation for Economic Co-operation and Development (OECD) countries, focusing in particular on the taxation of motor vehicle fuels and motor vehicles, and their impacts on the fuel-efficiency of the transport sector. In Section II, important interactions between a cap-and-trade system and other policy instruments meant to reduce CO2 emissions are discussed. I THE USE OF CARBON-RELATED TAXATION IN OECD COUNTRIES I.1 Carbon-related Taxation of Energy Products I.1.a Taxes on petrol and diesel Most countries in the world levy excise taxes on motor vehicle fuels.2 Figure 1.1 illustrates the total excise tax rates that applied to petrol and diesel in all OECD countries as of 1 January 2000 and 2010 respectively.3 When these taxes were first introduced, few people worried about emissions of CO2 or other greenhouse gases. Nevertheless, these taxes do have an impact on the 3 Columns Design XML Ltd / Job: Kreiser_X / Division: KETCCX_01 /Pg. Position: 1 / Date: 23/8 JOBNAME: Kreiser X PAGE: 4 SESS: 18 OUTPUT: Tue Aug 23...

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