Environmental Tax Reform: Principles from Theory and Practice to Date
IMF Working Papers, July 1, 2012
Source details
- Canonical URL
- Environmental Tax Reform: Principles from Theory and Practice to Date
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Bibliographic details
- Authors: Ian W.H. Parry, John Norregaard, Dirk Heine
- Published: July 1, 2012
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475505283.001
Summary and core recommendation
- Recommends a system of upstream taxes on fossil fuels, combined with refunds for downstream emissions capture, to reduce carbon and local pollution emissions.
- Motor fuel taxes should also account for congestion and other externalities associated with vehicle use, at least until mileage-based taxes are widely introduced.
Analysis of existing country systems
- Examination covers energy/environmental tax systems in Germany, Sweden, Turkey, and Vietnam.
- Concludes there is substantial scope for policy reform based on these country cases.
Policy findings and reform priorities
- Harmonize taxes for pollution content across different fuels and end-users.
- Better align tax rates with values for externalities.
- Scale back taxes on vehicle ownership and electricity use that are redundant (on environmental grounds) in the presence of more targeted taxes.
Subject areas and keywords (as listed)
- Subjects: Economic sectors, Environment, Environmental taxes, Expenditure, Fuel tax, Natural gas sector, Public expenditure review, Taxes
- Keywords: carbon tax, coal tax equivalent, corrective tax, country evaluation, design principles, direct tax, emissions tax, environmental tax, environmental taxes, externalities, factor tax distortion, fuel economy, fuel oil, fuel reduction, fuel tax, Fuel tax, fuel taxes, Global, Natural gas sector, Pigouvian tax, Public expenditure review, tax burden, tax expenditure, tax reform, value-added tax, vehicle ownership tax, WP