Carbon taxes

Margit Schratzenstaller

Chapter 11 in Elgar Encyclopedia of Energy Economics, 2025, pp 45-48 from Edward Elgar Publishing

Abstract: Carbon taxes are a form of environmental taxation aimed at internalizing the negative impacts of carbon dioxide emissions by assigning a price per ton of CO2 equivalent. Despite theoretical challenges in determining the optimal carbon price due to uncertainties in climate damage and abatement costs, carbon taxes are implemented globally, with 73 jurisdictions covering 23 per cent of worldwide greenhouse gas emissions as of April 2023. Empirical studies indicate that while carbon taxes can reduce emissions, the effects are often modest and influenced by the tax rate, design, and economic context. The macroeconomic impact of carbon taxes is generally neutral or positive, with effective revenue recycling, such as reducing social security contributions, enhancing economic benefits. Although carbon taxes may have regressive effects, appropriate compensation mechanisms can mitigate these impacts. Public acceptance of carbon taxes hinges on perceptions of fairness and effective communication strategies. Overall, carbon taxes are a critical tool for achieving emission reduction targets and fostering environmental and economic sustainability.

Keywords: Carbon Tax; Double Dividend; Compensation Measures; Macroeconomic Effects; Distributional Effects; Innovation (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035310364
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.elgaronline.com/doi/10.4337/9781035310371.00016 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

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:elg:eechap:22238_11

Ordering information: This item can be ordered from
http://www.e-elgar.com

Access Statistics for this chapter

More chapters in Chapters from Edward Elgar Publishing
Bibliographic data for series maintained by Jack Sweeney ().