Energy taxes in developed economies too low to fight climate change

Energy taxes in developed economies are not sufficient to reduce energy use, improve energy efficiency and drive a shift towards low-carbon sources.

The study examined taxes on energy use between 2012 and 2015 in 42 OECD and G20 economies, which represent around 80% of global energy use and carbon emissions from energy use.

The OECD found that almost all taxes are too low to help combat global warming, compared to a benchmark level of 30 euros per tonne of CO2.

“A bird’s eye view of effective taxes per tonne of CO2 across all countries reveals that there is hardly any change in the tax rates on emissions outside the road transport sector”, the report concludes. “Energy taxes are failing to attain their potential contribution to reaching economic, social and environmental policy goals,” said Angel Gurria, the OECD’s secretary general.

Coal, which accounts for almost half of carbon emissions in the 42 countries, goes untaxed in many countries, Reuters reports.

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