It has been suggested that carbon-energy taxes would need to be increased to a level of 20-30 ?/tonne CO2 in 2020 in order to accomplish a stabilisation target for greenhouse gas concentrations. While increases of carbon-energy taxes inevitably raise questions about the negative impacts on economic growth and competitiveness, the European experience shows that governments as part of already agreed environmental tax reforms (ETR) have in fact implicit carbon-energy taxes with a nominal level that in many cases exceeds this level. Still, European governments have exempt especially the energy-intensive industries and so to some extent for the biggest polluters the incentives to improve energy efficiency and shift towards low-carbon fuels have been weaker than the nominal rates would suggest. In view of the need to increase the real level of carbon-energy taxation, while retaining the competitiveness of the European economy, this paper addresses the member state mitigation approaches applied to energy-intensive industries in the ETR-countries.
Critical Issues in Environmental Taxation. International and Comparative Perspectives, Volume Vi, 2009, p. 101-122