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The use of revenues from carbon pricing

Author

Listed:
  • Melanie Marten
  • Kurt van Dender

Abstract

The paper collects comprehensive and detailed data on what 40 OECD and G20 economies do with the revenues from carbon taxes, emissions trading systems, and excise taxes on energy use. It notes that constraints – which can take the form of political commitments or legal earmarks – on revenue use differ between carbon taxes, emissions trading systems, and excise taxes. Constraints are less common for excise taxes, which also raise the most revenue. Carbon tax revenues are relatively often associated with environmental tax reforms, involving reductions in personal or corporate income taxes. Revenues from emissions trading systems are frequently directed towards green spending. The results may be relevant to the political economy of ambitious carbon pricing schemes in the sense that the political expedience of choices on revenue use may depend on the amount of revenue raised.

Suggested Citation

  • Melanie Marten & Kurt van Dender, 2019. "The use of revenues from carbon pricing," OECD Taxation Working Papers 43, OECD Publishing.
    • Handle: RePEc:oec:ctpaaa:43-en
    DOI: 10.1787/3cb265e4-en
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    Citations

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    Cited by:

    1. Diego R. Känzig & Maximilian Konradt, 2024. "Climate Policy and the Economy: Evidence from Europe’s Carbon Pricing Initiatives," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 72(3), pages 1081-1124, September.
    2. Gilbert E. Metcalf & James H. Stock, 2023. "The Macroeconomic Impact of Europe's Carbon Taxes," American Economic Journal: Macroeconomics, American Economic Association, vol. 15(3), pages 265-286, July.
    3. Filippo Maria D’Arcangelo & Ilai Levin & Alessia Pagani & Mauro Pisu & Åsa Johansson, 2022. "A framework to decarbonise the economy," OECD Economic Policy Papers 31, OECD Publishing.
    4. O'Donoghue, Cathal & Immervoll, Herwig & Gizem, Zeynep & Linden, Jules & Sologon, Denisa, 2024. "The distributional impact of carbon pricing and energy related taxation in Ireland," Papers BP2025/3, Economic and Social Research Institute (ESRI).
    5. Alberto Gago & Xavier Labandeira & José M. Labeaga & Xiral López Otero, 2021. "Transport Taxes and Decarbonization in Spain: Distributional Impacts and Compensation," Hacienda Pública Española / Review of Public Economics, IEF, vol. 238(3), pages 101-136, September.
    6. Sung Eun Kim & Seung Yeob Kim & Junwoo Suh, 2024. "Public support for carbon tax in South Korea: The role of tax design and revenue recycling," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 11(2), May.
    7. Proost, Stef, 2024. "Looking for winning policies to address the climate issue in EU-aviation," Journal of Air Transport Management, Elsevier, vol. 115(C).
    8. Jiahao Zhang & Chaolin Li & Xiangnan Ji & Li Zhang & Yanjun Chen, 2024. "Research on the Application of Conjoint Analysis in Carbon Tax Pricing for the Sustainable Development Process of China," Sustainability, MDPI, vol. 16(21), pages 1-24, October.

    More about this item

    Keywords

    carbon pricing; climate change; effective carbon rates; environmental tax reform; external costs;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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