Publication: What is the Role of Carbon Taxes in Climate Change Mitigation?
This note argues that a carbon tax system is more practical to implement, monitor and enforce than tradable permit-based approaches to global climate-change action. It suggests that a sensible design will be an upstream carbon tax on the fossil fuel supply chain, which can also include other major non-(carbon monoxide) CO2 greenhouse gases (GHGs). While risks such as fiscal cushioning exist, a tax-based system will be more transparent and offer the appropriate incentives for participation and compliance.
“Aldy, Joseph; Ley, Eduardo; Parry, Ian. 2008. What is the Role of Carbon Taxes in Climate Change Mitigation?. PREM Notes; No. 2. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/4f177640-f763-5e56-b37f-783c2708c4a4 License: CC BY 3.0 IGO.”