Vikings and virtues: a decade of CO2 taxation |
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Authors: | Mikael Skou Andersen |
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Affiliation: | Department of Policy Analysis , National Environmental Research Institute (NERI) , Denmark |
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Abstract: | Abstract Experience with implementation of CO2 taxes spans almost a decade in the Nordic countries, and time is ripe for an evaluation of their performance. In contrast to ex-ante forecasts, empirical research can show the extent to which such taxes deliver on the assumptions of economic theory. A survey of the existing literature shows that there are currently 20 ex-post studies of the full or partial effects of CO2 taxes. Evaluations are complicated by frequent changes in tax rates, widespread exemptions and the ‘too many variables’ problem. Attempts have been made to deal with these problems by using a variety of approaches and research techniques, some more advanced than others. On balance the studies appear to show that emissions have been curbed when compared to businessas-usual forecasts, while absolute CO2 reduction remains the exception. Among the Nordic countries, Denmark's scheme, which combines taxes with subsidies for energy efficiency, seems to have attained the most marked results, although the achieved reductions also reflect the higher carbon content of the Danish energy sector. The evaluations differ considerably in scope, approach and methodology. Methodological issues connected with expost evaluation are considered. An adequate evaluation of the impact of the CO2 taxes, in both environmental and economic terms, will require the establishment of comprehensive panel databases of energy consumers. |
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Keywords: | Climate policy CO2 Energy Environmental taxes Ex-post evaluation Implementation |
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