| By: |
David Newbery |
| Abstract: |
The same fuels are taxed at widely different rates in different countries
while different fuels are taxed at widely different rates within and across
countries. Coal, oil and gas are all used to generate electricity, but are
subject to very different tax or subsidy regimes. This paper considers what
tax theory has to say about efficient energy tax design. The main factors for
energy taxes are the optimal tariff argument, the need to correct
externalities such as global warming, and second-best considerations for
taxing transport fuels as road charges, but these are inadequate to explain
current energy taxes. EU energy tax harmonisation and Kyoto suggest that the
time is ripe to reform energy taxation. |
| Keywords: |
tax, energy, oil, optimal tariff, externalities, exhaustible resources, global warming, road charges |
| JEL: |
Q4 Q48 H21 H23 L71 R48 |
| Date: |
2005–01 |
| URL: |
http://d.repec.org/n?u=RePEc:cam:camdae:0508&r=res |