Coase-Sandor Working Paper Series in Law and Economics
Publication Date
2011
Publication Title
Law & Economics Working Papers
Abstract
The current pricing mechanism for carbon in the EU, the EU emissions trading system, only covers 40 percent of emissions. Carbon taxation currently plays no role. The Commission has recently proposed to revise the energy tax system in the EU to include a carbon tax component. This paper evaluates the Commission proposal and considers the possible expansion of the EU carbon pricing base either by expanding emissions trading to cover more sectors or by enacting a carbon tax. It concludes that there are strong arguments for expanding the carbon pricing base, as suggested by the Commission. Nevertheless, expanding the base should done through a unified system, such as expanding the coverage of the emissions trading system or enacting an economy-wide carbon tax rather than through having side-by-side taxes and trading, as in the Commission proposal.
Number
566
Recommended Citation
David A. Weisbach, "Carbon Taxation in Europe: Expanding the EU Carbon Price" (John M. Olin Program in Law and Economics Working Paper No. 566, 2011).
Additional Information
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