Carbon Taxation in the EU: Expanding EU Carbon Price
AbstractThe current pricing mechanism for carbon in the EU, the EU emissions trading system, only covers 40 percent of emissions. Carbon taxation currently plays no role. The Commission has recently proposed to revise the energy tax system in the EU to include a carbon tax component. This paper evaluates the Commission proposal and considers the possible expansion of the EU carbon pricing base either by expanding emissions trading to cover more sectors or by enacting a carbon tax. It concludes that there are strong arguments for expanding the carbon pricing base, as suggested by the Commission. Nevertheless, expanding the base should done through a unified system, such as expanding the coverage of the emissions trading system or enacting an economywide carbon tax rather than through having side-by-side taxes and trading, as in the Commission proposal.
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Bibliographic InfoPaper provided by Oxford University Centre for Business Taxation in its series Working Papers with number 1115.
Date of creation: 2011
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This paper has been announced in the following NEP Reports:
- NEP-ACC-2011-10-09 (Accounting & Auditing)
- NEP-ALL-2011-10-09 (All new papers)
- NEP-ENE-2011-10-09 (Energy Economics)
- NEP-ENV-2011-10-09 (Environmental Economics)
- NEP-EUR-2011-10-09 (Microeconomic European Issues)
- NEP-PBE-2011-10-09 (Public Economics)
- NEP-REG-2011-10-09 (Regulation)
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