Taxes on polluting fuels are too low says OECD

Sep 23, 2019

According to a new OECD report 70 percent of energy-related CO2 emissions from advanced and emerging economies are entirely untaxed, offering little incentive to move to cleaner energy.

A preview of the OECD publication Taxing Energy Use 2019 outlines that 44 countries count for 80 percent of energy emissions, yet taxes on polluting sources are not set anywhere near the levels needed to reduce the ricks and impacts of climate change and air pollution.

“We know we need to burn less fossil fuel, but when taxes on the most polluting fuels are zero or close to zero, there is little incentive to change,” said OECD Secretary-General Angel Gurria. “Energy taxes are not the sole solution, but we can’t curb climate change without them. They should be applied fairly and used to improve well-being and ease the energy transition for vulnerable groups”.

According to the OECD, adjusting taxes, along with state subsides and investment, is vital to encourage a shift to low-carbon transport, industry and agriculture.

Read a summary of the OECD’s findings.