Reforming the EU Energy Tax Directive: Assessing the Options
Ian Parry and
Herman R.J. Vollebergh
No 5749, CESifo Working Paper Series from CESifo
Abstract:
The efficiency case for raising fuel tax minima under the EU Energy Tax Directive (ETD) appears nuanced. Some fuels may be undertaxed (e.g., road diesel, natural gas), while others may be adequately taxed already (e.g., gasoline). Reform proposals would increase some minima, including for road diesel and natural gas, while leaving that for gasoline unchanged. This is a step in the right direction, though the climate, fiscal, health, and net economic benefits are limited. There are potentially much larger gains from extending tax minima to fuels (especially coal) covered by the EU Emissions Trading System (if the cap is tightened). Two-speed systems (with lower minima for low-income countries) may improve political acceptability, while sacrificing little in terms of climate benefits. Under higher, but still plausible, environmental damage assumptions than used here, there is a case for reviving ETD reform, whatever its exact structure.
Keywords: energy tax directive; climate; tax floor; efficiency (search for similar items in EconPapers)
JEL-codes: H23 Q54 Q58 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp5749.pdf (application/pdf)
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:ces:ceswps:_5749
Access Statistics for this paper
More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().