Economic/Fiscal Instruments: Carbon and Energy Taxation

This study analyzes the feasibility of applying carbon and energy taxes at a common level within Annex I countries drawing from existing experience with taxes implemented to reduce energy-related CO2 emissions, as well as from a range of available modeling and policy studies. The study concludes that progressive implementation of carbon/energy taxes, along with fiscal reform, and a clear schedule for their evolution over time could help to minimize the economic costs associated with CO2 reduction.