Publication

This paper assesses the empirical evidence of the main economic impacts of carbon taxes. After briefly comparing carbon taxes with energy taxes - with the finding that carbon taxes are more cost-effective in reducing carbon dioxide emissions - the authors then move on to discuss the 'double dividend' of carbon tax revenues. The impact of a domestic carbon tax on the distribution of income and the implications for the international competitiveness of economies are then considered. The regressive impacts on income of such a tax are found to be relatively weak, and existing studies seem to indicate that competitive losses are not significant.