‘Governments should make better use of environmental taxes’ is the conclusion of the OECD’s latest Global International Tax Dialogue (ITD) conference. Taxes are potentially among the most effective ways of cutting pollution and greenhouse gas emissions, but they are currently underused or designed in a suboptimal way, OECD secretary-general Angel Gurría said last week on publication of the report Taxing Energy Use 2015.
According to Gurría, ‘current energy taxes are often too low – in particular for coal, which is sometimes not taxed at all; and they are incoherent, with different tax levels on energy types with similar environmental impacts. For example, in 39 out of the 41 countries surveyed, diesel is taxed at lower rates than gasoline, despite its greater environmental footprint. Recent work undertaken by the OECD demonstrates that taxes on energy use are less regressive than is commonly thought. The impact of current policies on competitiveness is very small or inexistent, meaning that a gradual increase in environmental taxation is compatible with a competitive economy.’
The ITD is a joint initiative of the OECD, EC, IMF, the World Bank, Inter-American Development Bank (IDB) and Inter-American Center of Tax Administrations (CIAT). The ITD facilitates international dialogue on tax policy and administration. In the lead up to COP21, 300 senior tax and environment policymakers, tax administrators and experts from more than 90 countries met in Paris this week to identify practical ways of harnessing the power of taxation as an environmental policy tool.
‘Governments should make better use of environmental taxes’ is the conclusion of the OECD’s latest Global International Tax Dialogue (ITD) conference. Taxes are potentially among the most effective ways of cutting pollution and greenhouse gas emissions, but they are currently underused or designed in a suboptimal way, OECD secretary-general Angel Gurría said last week on publication of the report Taxing Energy Use 2015.
According to Gurría, ‘current energy taxes are often too low – in particular for coal, which is sometimes not taxed at all; and they are incoherent, with different tax levels on energy types with similar environmental impacts. For example, in 39 out of the 41 countries surveyed, diesel is taxed at lower rates than gasoline, despite its greater environmental footprint. Recent work undertaken by the OECD demonstrates that taxes on energy use are less regressive than is commonly thought. The impact of current policies on competitiveness is very small or inexistent, meaning that a gradual increase in environmental taxation is compatible with a competitive economy.’
The ITD is a joint initiative of the OECD, EC, IMF, the World Bank, Inter-American Development Bank (IDB) and Inter-American Center of Tax Administrations (CIAT). The ITD facilitates international dialogue on tax policy and administration. In the lead up to COP21, 300 senior tax and environment policymakers, tax administrators and experts from more than 90 countries met in Paris this week to identify practical ways of harnessing the power of taxation as an environmental policy tool.
