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International Policies on Carbon Taxation - Dictionary of Arguments

Stavins I 170
Carbon taxation/Carbon Tax/International Taxes/Harmonized Domestic Taxes/Carbon Pricing Coordination/International policies/Stavins: In principle, a carbon tax could be imposed on nation states by an international agency. The supporting agreement would have to specify both tax rates and a formula for allocating the tax revenues. Cost-effectiveness would require a uniform tax rate across all countries. It is unclear, however, what international agency could impose and enforce such a tax, and so an alternative more frequently considered has been a set of harmonized domestic carbon taxes (Cooper, 2010)(1). In this case, an agreement would stipulate that all countries are to levy the same domestic carbon taxes and retain their revenues. But some developing countries may argue that the resulting distribution of costs does not conform to principles of distributional equity and call for significant resource transfers. Under a harmonized tax system, an agreement could include fixed lump-sum payments from developed to developing countries, and under an international tax system, an agreement could specify shares of the total international tax revenues that go to participating countries. As an alternative to these explicit transfers, developed countries could commit to constrain the use of their tax revenues in ways that produce global benefits. In some developing countries reluctant to implement a carbon tax, an initial cost-effective contribution to combat climate change could take the form of reducing fossil fuel subsidies.
Stavins I 171
Lowering energy subsidies can free up government revenues that could be directed
to other beneficial uses and improve the allocation of resources in the economy to promote faster economic growth. >Carbon Pricing Coordination/Stavins.


1. Cooper, R. N. (2010). The case for charges on greenhouse gas emissions. In J. E. Aldy & R. N. Stavins (Eds.), Post-Kyoto international climate policy: Implementing architectures for agreement (pp. 151-178). New York, NY: Cambridge University Press.


Robert N. Stavins & Joseph E. Aldy, 2012: “The Promise and Problems of Pricing Carbon: Theory and
Experience”. In: Journal of Environment & Development, Vol. 21/2, pp. 152–180.


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International Policies
Stavins I
Robert N. Stavins
Joseph E. Aldy
The Promise and Problems of Pricing Carbon: Theory and Experience 2012


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