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Contribution to Book
Environmental Taxes
Dimensions of Tax Design (2010)
  • Don Fullerton , University of Illinois at Urbana-Champaign
  • Andrew Leicester
  • Stephen Smith , University College London
Abstract
This paper provides an overview of key economic issues in the use of taxation as an instrument of environmental policy. Part A reviews economic arguments for using taxes and other market mechanisms in environmental policy, discusses the choice between taxes directly on measured emissions or less-directly related to emissions, and considers the value of the revenue from environmental taxes. We argue that environmental tax revenues do not significantly alter economic constraints on tax policy, and that environmental taxes need to be designed and justified primarily by the cost-effective achievement of environmental goals. Part B discusses key areas where environmental taxes appear to have significant potential – including taxes on energy used by industry and households, road transport, aviation, and waste. In some of these areas, efficient environmental tax design needs to make use of a number of taxes in combination – a “multi-part instrument”.
Keywords
  • pollution tax,
  • environmental regulation,
  • economic efficiency
Disciplines
Publication Date
2010
Editor
Institute for Fiscal Studies (IFS)
Publisher
Oxford University Press
Citation Information
Don Fullerton, Andrew Leicester and Stephen Smith. "Environmental Taxes" OxfordDimensions of Tax Design (2010)
Available at: http://works.bepress.com/don_fullerton/37/