Designing Fiscal Policy to Address the External Costs of Energy

Ian Parry

International Review of Environmental and Resource Economics, 2015, vol. 8, issue 1, 1-56

Abstract: This paper first reviews the conceptual case for, and appropriate design of, fiscal policies to address major externalities associated with energy use — global warming, local air pollution, and various side effects (e.g., congestion) from motor vehicles. Techniques for (roughly) estimating the magnitude of these externalities, and corrective energy taxes, on a country-by-country basis are then described. The implications for reforming energy taxes, and the potential environmental, health, and fiscal benefits from reform, are then illustrated for different countries. A key theme of the paper is the critical role of finance ministries in administering tax reforms and ensuring efficient use of revenues.

Keywords: Externalities; energy taxes; getting prices right; air pollution; global warming (search for similar items in EconPapers)
JEL-codes: H23 Q48 Q54 Q58 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: Designing Fiscal Policy to Address the External Costs of Energy (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:now:jirere:101.00000065

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