OECD Says Tax Emissions More

February 15, 2018 International Tax Cooperation

tax on emissionsWASHINGTON D.C. – Developed countries around the globe are not taxing polluters enough to compensate for the harm they are doing to the environment.

The OECD has issued a new report which states that governments around the world are not using taxes to effectively slow down climate change.

Taxes are claimed to be an effective means of encouraging emitters to reduce their emissions levels or to move towards cleaner energy or more energy efficient products and methods.

However, an analysis of the taxes on emissions across 42 OECD and G20 countries between 2012 and 2015 indicated that such taxes are underutilized.

Aside from taxes on road transport, nearly 81 percent of emissions were untaxed in 2015.

The emissions which were taxed were taxed at less than EUR 30 per tonne of carbon dioxide approximately 97 percent of the time.

The EUR 30 threshold is the estimate climate cost of emissions, and is regarded as a good point to determine whether taxes are high enough.

However, when examining taxes on road transport, it was found that 97 percent of emissions are taxed, and approximately 47 percent of those emissions are taxed at over EUR 50 per tonne.