Carbon Taxation in Europe
Main Developments and Trends
DOI:
https://doi.org/10.14422/icade.i111.y2021.001Keywords:
carbon taxes, carbon prices, carbon price floor, collection destination, emissions allowances tradingAbstract
The 2050 decarbonization target for the European Union (EU) economy poses numerous challenges, for which considerable volumes of investment are required. In this context, carbon taxation is a tool that introduces price signals that promote behavioral change of agents. It also raises funds to finance general budgets, promote investments for the transition to a low-carbon economy, support the most affected companies by international competition and the most vulnerable households.
Numerous European countries have developed carbon taxes (e.g. Denmark, Finland, France, Ireland, Iceland, the Netherlands, Norway, Portugal, Sweden, Switzerland, and the United Kingdom), which aim to complement the EU Emissions Trading Scheme and compensate for the fact that Directive 2003/96/EC does not establish tax rates on energy sources according to their carbon content. This article reviews the main characteristics of these figures, compares them and draws out the main trends in this area.
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