The OECD urges to use taxes to fight climate change

Some 70% of energy-related carbon dioxide (_CO2) emissions are not subject to any tax, according to the OECD, which regrets that taxes are no longer used to combat climate change and air pollution. In a report published on Tuesday, the Organisation for Economic Co-operation and Development (OECD) highlights that, apart from fuels used in road transport, only 18% of other emissions have some type of tax. And, in reality, only 3% are taxed at least €30 (about $33) per tonne of _CO2, which is considered a minimum benchmark for compensating for environmental damage.

A minimum that, however, would not even allow to achieve the objectives of the Paris Agreement on climate change to limit the increase in global temperature to two degrees by the end of the century. Only four of the 44 countries analysed in the study (Denmark, the Netherlands, Norway and Switzerland) have rates higher than those 30 euros for emissions that occur outside of road transport. Spain is at the bottom of the table, with just under 5 euros per ton ($5.5).

The OECD recalls that the fuel of aircraft and ships, when used for international transport, is not subject to any tax despite the fact that these activities contribute significantly to climate change.

If it were a country, the emissions generated by international maritime traffic would be the ninth that contributes the most to global warming, and those of aviation the twelfth.

Coal, which is responsible for half of the emissions, is subject to virtually zero taxation (0.73 euros/0.80 dollars per ton of _CO2, on average).

Gasoline is by far the fossil fuel subject to a higher taxation, at €85.83 per tonne ($94.5), followed by diesel (€73.76/$81.2) and, by a very long distance, liquefied petroleum gas (€11.12/$12.2) and natural gas (€5.26/$5.79).

The authors of the report note that last year global _CO2 emissions increased by 1.8% to an all-time high, a development that is in contradiction with the goal of a deep reduction set in the Paris Agreements.

If the total tax burden for _CO2 emissions were set at €30 per tonne, that would generate around 1% of gross domestic product (GDP) in these 44 countries.

The OECD stresses that thanks to this money, in-depth fiscal reforms could be carried out, such as reducing income tax or increasing investments in fields that increase productivity, such as education, health or infrastructure.

Source: The Newspaper