Applying energy taxes

Accepting taxation of fossil fuel use
Green taxation

Description

Applying energy taxes involves imposing levies on the production, distribution, or consumption of energy sources, particularly fossil fuels, to incentivize energy efficiency and reduce environmental harm. This strategy aims to internalize the external costs of energy use, such as pollution and greenhouse gas emissions, by making unsustainable energy options less economically attractive. The practical intent is to encourage cleaner energy alternatives, promote conservation, and generate revenue for environmental initiatives or public services.

Implementation

Many countries already tax the use of oil.

Claim

Green taxes raise a lot of revenue. But they have failed to change behaviour. Energy consumption, for example, continues to rise despite high fuel taxes because the choices available to consumers are too limited. To improve energy efficiency, taxation needs to cover all industry sectors, treat all fuels equally and be set at a rate that changes behaviour. Any revenue raised should be used to give manufacturers and consumers the opportunity and the incentive to reduce emissions.