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Carbon taxes or similar pricing instruments could play a crucial role in helping countries decarbonise their economies. No country has a single carbon price that applies to all greenhouse gas emissions. The UK is typical in having adopted a complex patchwork of policies that raise the cost of different polluting activities to different degrees, resulting in implied carbon taxes that vary greatly across sources of emissions. We document and quantify these inconsistencies in the case of the UK, and assess the case for greater uniformity after accounting for considerations of efficiency, distribution, carbon leakage and the use of alternative policy instruments. We argue for greater rationalisation of environmental taxes in the UK and other developed economies.
Authors
Senior Economist
Stuart is a Senior Economist working in the Tax sector, and focuses on analysing the design of the tax and benefit system.
Research Economist
Isaac is a Research Economist in the Taxation sector, focusing on the taxation of high-income individuals and closely-held corporate entities.
Associate Director
Peter joined in 2009. He has published several papers on the microeconomics of household spending and labour supply decisions over the life-cycle.
Journal article details
- DOI
- 10.1111/1475-5890.12308
- Publisher
- Institute for Fiscal Studies
- Issue
- Volume 43, Issue 3, October 2022, pages 235-263
Suggested citation
Adam, S et al. (2022). 'Tax policies to reduce carbon emissions' Fiscal Studies, Volume 43, Issue 3: Symposium: Perspectives on carbon taxes, 43(3/2022), pp.235–263.
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