Environmental Tax Reform: Principles from Theory and Practice to Date

 
Author/Editor: Heine, Dirk ; Norregaard, John ; Parry, Ian W.H.
 
Publication Date: July 01, 2012
 
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
Summary: This paper 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. An examination of existing energy/environmental tax systems in Germany, Sweden, Turkey, and Vietnam suggests that there is substantial scope for policy reform. This includes harmonizing taxes for pollution content across different fuels and end-users, better aligning tax rates with values for externalities, and scaling back taxes on vehicle ownership and electricity use that are redundant (on environmental grounds) in the presence of more targeted taxes.
 
Series: Working Paper No. 12/180
Subject(s): Cross country analysis | Energy taxes | Environmental protection | Germany | Sweden | Tax reforms | Tax system reviews | Turkey | Vietnam

Author's Keyword(s): Environmental taxes | design principles | externalities | fuel taxes | country evaluation
 
English
Publication Date: July 01, 2012
Format: Paper
Stock No: WPIEA2012180 Pages: 38
Price:
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