Environmental Tax Reform: Principles from Theory and Practice

Ian Parry, John Norregaard and Dirk Heine
Additional contact information
John Norregaard: Fiscal Affairs Department, International Monetary Fund, Washington, DC 20431
Dirk Heine: E3 Foundation, Cambridge CB5 8AF, United Kingdom

Annual Review of Resource Economics, 2012, vol. 4, issue 1, 101-125

Abstract: On the basis of the environmental tax literature, this article 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. Policy options include harmonizing taxes for pollution content across different fuels and end users, better aligning tax rates with (albeit crude) values for externalities, and scaling back excise taxes on vehicle ownership and electricity use that are redundant (on environmental grounds) in the presence of more targeted taxes.

Keywords: environmental taxes; design principles; externalities; fuel taxes; country evaluation (search for similar items in EconPapers)
JEL-codes: H23 Q38 Q48 Q58 (search for similar items in EconPapers)
Date: 2012
References: Add references at CitEc
Citations: View citations in EconPapers (33)

Downloads: (external link)
http://www.annualreviews.org/doi/abs/10.1146/annurev-resource-110811-114509 (application/pdf)
Full text downloads are only available to subscribers. Visit the abstract page for more information.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:anr:reseco:v:4:y:2012:p:101-125

Ordering information: This journal article can be ordered from
http://www.annualreviews.org/action/ecommerce

Access Statistics for this article

More articles in Annual Review of Resource Economics from Annual Reviews Annual Reviews 4139 El Camino Way Palo Alto, CA 94306, USA.
Bibliographic data for series maintained by http://www.annualreviews.org ().