Carbon Taxation: A Tale of Three Countries (original) (raw)
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Environmental taxation for good and for bad: the efficiency and legitimacy of Sweden's carbon tax
Environmental Politics, 2009
The apparent unpopularity of the Swedish carbon tax on fuels for passenger cars is examined in relation to alternative climate policy measures to decrease carbon emissions from private transport. Using original survey data, it is found that the carbon tax may not be as unpopular as is typically conjectured. Differently put, its (un)popularity is partly determined by how it is framed in today's debate on how society should combat climate change. It is also found that since the total social cost of combating climate change may actually increase as a result of replacing the carbon tax with alternatives, e.g. subsidised green fuels and expanded public transportation, there is a rationale for informing the public about the costs of those policy alternatives. If it is desirable to implement environmental taxes or to increase existing ones, they should perhaps be framed differently than they are today. One suggestion is to present the taxes in relation to the alternatives, where the means to finance them are given along with comparisons of both their likely effects on emissions and their private and social costs.
CARBON TAX -AN EFFECTIVE STRATEGIC TOOL OR THE WRONG TOOL AT THE WRONG TIME
Carbon taxes are viewed by some national and international policy makers as a necessary cornerstone in Greenhouse Gas emission reduction strategies. Carbon taxes have a twofold purpose: (i) to increase the price on fuel to induce behavioural changes which in turn incentivize consumers to (ii) seek lower carbonintensive available options, which ultimately leads to reductions in GHG emissions. This paper describes the development of the Canadian federal carbon tax policies, and its role and utility in reducing GHG emissions. Since 2016 the government of Canada has expended $110 billion to reduce GHG emissions. The revenue neutral carbon tax scheme contributes a pittance to the funding of the hundreds of federal, provincial and territorial carbon reduction initiatives and actions and in its effectiveness of cutting GHG emission reductions. Market influences have trivialized any emission reduction incentives by government policies increasing the cost of fuel. Options for substituting non carbon alternatives are in their early stages of development and require more lead time to become viable. The carbon tax implementation coupled with the recent economic turmoil, continuing inflation and looming recession has adversely affected all Canadians and points to the conclusion that the carbon tax, at this time, is unnecessary and unneeded.
Addressing Climate Change Through a Low-Cost, High-Impact Carbon Tax
The Journal of Environment & Development, 2019
This article considers design features of a low-cost, high-impact carbon tax in terms of emissions reductions, drawing on international implementation experience. Costs can be reduced by offsetting carbon taxes with reductions in other taxes, using carbon tax revenue to compensate stakeholders, and incremental implementation. Impacts can be augmented by investing revenue in emissions reduction activity and complementary tax incentives for low-emissions technologies. Jurisdictions that have implemented such carbon taxes have continued to experience strong economic growth. While revenue and distributionally neutral carbon taxes that do not increase the overall tax take or change the distribution of wealth have been effectively introduced in many jurisdictions, this has not been the only approach. The more fundamental conclusion is that carbon taxes are being designed to maximize political acceptability and minimize economic disruption in their implementation context. This evidence of ...
What Price Carbon? Theory and Practice of Carbon Taxation in the OECD
2009
To date, seven jurisdictions across the OECD have implemented explicit carbon taxes, approximating what textbook economic theory prescribes with varying degrees of success. The purpose of this paper is to "take stock" of the current state of carbon taxation in the OECD, identify patterns, differences, and best practices. After a brief discussion of carbon pricing, the paper compares carbon taxes where they have been implemented relative to each other, as well as relative to the theoretical ideal. Apart from identifying gaps between carbon tax theory and practice, and highlighting patterns and key differences among jurisdictions with carbon taxes, the ultimate goal of the paper is to develop an alternative measure of the price of carbon for use in quantitative empirical (explanatory) analysis.
Ecological Economics, 2000
Carbon taxes have been frequently advocated as a cost-effective instrument for reducing emissions. However, in the practice of environmental policies, only six countries have implemented taxes based on the carbon content of the energy products. In this paper, we evaluate carbon taxes with regard to their competitiveness, distributional and environmental impacts. The evidence shows that carbon taxes may be an interesting policy option and that their main negative impacts may be compensated through the design of the tax and the use of the generated fiscal revenues.
Two Perspectives on Implementation of Carbon Tax Tackling Climate Change: A Literature review
Journal of Student Research, 2021
The international community has been continuously discussing carbon tax as a means to tackle climate change. In July 2021 came the announcement of the European Union's Carbon Border Adjustment Mechanism (CBAM). Many countries have expressed their concerns over its impact on their economies. This article reviews a total of ten articles, including eight journal papers, one policy paper and one news article, related to the implementation of carbon tax. Two distinct perspectives over carbon tax can be discerned from this literature review. One sees that the introduction of carbon taxes can help to mitigate climate change. Another sees it leading to negative economic ripple effects, acting as a new kind of tax-free barrier. The CBAM policy itself is still just beginning to be implemented, so no one is sure how the outcome of its implementation will affect each country's economic structure. Neither is it clear how to do a detailed estimation without first knowing to what extent im...
The politics of carbon taxation in France: preferences, institutions, and ideologies
France's energy mix leaves 68% of CO2 emissions out of the European Union Emissions Trading Scheme, thus providing a strong rationale for implementing carbon taxation. Diffuse sources of CO2 emissions such as transport and housing have indeed risen by respectively 9% and 2% between 1990 and 2009. However, three successive governments have failed to implement carbon taxation.
The effectiveness of carbon taxing in mitigating climate change
2020
It is well acknowledged that addressing climate change effectively should be of highest importance in the 21 st century. Various approaches have emerged in response to the challenges posed by climate change and global warming. Market-based instruments in particular aim to provide a cost-effective approach in curbing CO2 emissions and thus mitigating climate change. Even though various studies have come to the conclusion that emission trading systems are not successful in mitigating the large-scale consequences of climate change, the overall effectiveness of another market-based instrument, namely carbon taxing, is still under consideration. This thesis aims to contribute to the existing pool of literature by evaluating to what extent carbon taxing is successful in reducing per capita CO2 emissions and thus mitigating climate change. Consequently, this thesis has analized 54 (high-income) countries over a 28 year-long period to establish whether countries with implemented carbon taxing initiatives have significantly lower levels of per capita CO2 emissions. The results of the panel regression indicate that the presence of a carbon tax leads to an overall 14.5% decrease in per capita emissions among high-income countries. Therefore the conclusion can be drawn that carbon taxing can serve as an important and effective policy-instrument in addressing climate change.
Analysis of Carbon Tax on Selected European Countries: Does Carbon Tax Reduce Emissions?
Since the first days of its existence, the humanity had been using natural resources to meet its needs. Especially along with the globalization period as a result of the Industrial Revolution and the rapid development of communication technologies within the last fifty years, the production has increased significantly in the world and has created negative effects on the environment. The leading adverse effects involve the emission of greenhouse gases and the global warming, which stem from the energy supply of fossil fuels as the main inputs of production. The global warming can be described as an increase in temperature worldwide. Irreversibility is the most important feature of the global warming. Therefore, in the absence of objective measures, the future costs would be much higher than the current ones. For this reason, governments need to take various measures to reduce the volume of emissions. The most important of these measures is carbon taxes. Carbon taxation encourages individuals to use fewer fossil fuels and to find new sources of energy by increasing the cost of using fossil fuels that cause carbon dioxide emissions through the price mechanism. To this end, the impacts of carbon tax levied in 18 selected European countries on economic growth, urbanization, natural gas and petroleum usage, and CO 2 emissions are examined by panel data analysis for the 1995-2015 period. The analysis results indicate that a 1% increase in environmental taxes reduces carbon dioxide emissions by 0.9%. Furthermore, it is reported that a 1% increase in natural gas and petroleum consumption among the variables included in the analysis increased carbon dioxide emissions by 0.1% and 0.7%, respectively; while a 1% increase in urbanization reduced carbon dioxide emissions by 0.9%.