• 4 minutes Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 9 minutes Could Venezuela become a net oil importer?
  • 15 minutes Oil prices going Up? NO!
  • 1 hour The Tony Seba report
  • 3 hours Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 1 hour Harley-Davidson "Made in EU"
  • 47 mins Could Venezuela become a net oil importer?
  • 23 mins Time Of Recession - China and Europe Are Warning That A Trade War Could Trigger A Global Recession
  • 3 hours Erdogan After Erdogan: New Presidential Mandate After Yesterday's Elections
  • 7 hours LNG Shortage on the Way
  • 3 hours The U.S. Will Soon Give North Korea a Timeline of 'Specific Asks
  • 13 hours Kenya Eyes 200+ Oil Wells
  • 13 hours Are Electric Vehicles Really Better For The Environment?
  • 5 hours Sell out now or hold on?
  • 17 hours Renewables to generate 50% of worldwide electricity by 2050 (BNEF report)
  • 22 hours Saudi Arabia turns to solar
  • 13 hours OPEC soap opera daily update
  • 48 mins Could oil demand collapse rapidly? Yup, sure could.
  • 4 hours No LNG Pipelines? Let the Trucks Roll In

Carbon Taxes can Help Solve the European Debt Crisis

A new report from NGO’s the European Climate Foundation, Green Budget Europe, and consultancy Vivid Economics suggests that green taxes could play a crucial role in tackling Europe’s debt crisis. Carbon and energy taxes will raise revenue and reduce greenhouse gas emissions, whilst at the same time having a less negative impact on economic growth than conventional fiscal means such as income tax and VAT.

The report states that “the overriding challenge for many European governments today is to reduce major fiscal deficits with the least collateral damage to the economy. This report shows that carbon fiscal measures may raise significant revenues while having a less detrimental macro-economic impact than other tax options. This gives them an important potential role in fiscal policy; a role that is currently widely overlooked.”

It concluded that direct taxes could have double the negative impact on GDP than energy taxes, yet both would provide the same revenue. John Ward from Vivid Economics explained that market dynamics mean that people tend to react less to changes in price, than they do to changes in their own income.

The report is supported by former German Finance Minister Hans Eichel, former Austrian Vice Chancellor Dr Josef Riegler, and former Czech Deputy Prime Minister Dr Martin Bursik, who all wrote to the European finance ministers urging them to consider carbon taxation as a means of aiding the European economy.

“Pound for Pound, Euro for Euro, energy and carbon taxes have a lower negative impact on the economy, consumption and jobs than income tax and VAT. They offer less pain, and more gain. Europe needs a fiscal recovery, it needs to cut its emissions and it needs a strategy for growth. Carbon taxes and an effective ETS can be a powerful part of the solution.”

By. James Burgess of Oilprice.com



Join the discussion | Back to homepage

Leave a comment
  • Al Lindner on May 16 2012 said:
    So the problem in the EU is that they don't pay enough taxes?

    It is thinking like this that has led to their uncompetitiveness and current economic crisis!

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News