Variable national oil taxes obstruct an effective carbon tax

Large differences in the selling price of energy in the industrialised countries present a major obstacle to international attempts to control carbon dioxide emissions, according to a report by the Centre for Global Energy Studies (CGES).1 For a carbon tax to be effective, the report warns, it must be levied at higher levels in those countries which already have high fuel taxes - and the absolute level must be considerably higher than the European Commission's proposed tax of $10 per barrel.

The CGES is a non-profit body set up in 1990 by Sheikh Yamani, the former Saudi Arabian oil minister. Though this background may be expected to bias it towards oil, its report helpfully highlights one of the key problems facing the effort to develop a harmonised carbon tax regime.

While not yet dead in the water, the European Commission's proposed carbon/energy tax is struggling to stay afloat (ENDS Report 208, pp 33-35

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