Technical Workshop 8: Carbon Tax (Cologne)

Photo Credit: Thomas Depenbusch
In response to growing interest in carbon taxes, the PMR Secretariat hosted the Technical Meeting on Carbon Tax to facilitate the exchange of views and discussions among countries that have implemented a carbon tax or are preparing or considering to do so.
May 29, 2014
Cologne, Germany
May 29, 2014
8:30 Registration
1. Opening and Introduction
Moderator: Michael Toman, World Bank
Xueman Wang, PMR Secretariat
2. Carbon Tax Development in the PMR Implementing Countries
A number of PMR Implementing Countries are exploring, preparing or developing a carbon tax. These countries provided short introductions to the status of their domestic carbon tax.
Aloisio de Melo, Ministry of Finance, Brazil
Nicola Borregaard, Ministry of Energy, Chile
Chile: Carbon Tax Developments
Luis Munozcano, Ministry of Environment and Natural Resources (SEMARNAT), Mexico
Mexico: Carbon Tax
Mexico: Development on Emissions Trading on the Power Sector
Peter Janoska, National Treasury, South Africa
South Africa: Package of Measures to Deal with Climate Change and the Role of a Carbon Tax
10:45 Break
3. Overview of Carbon Tax Development around the World
Expert presentation on carbon tax development in the world including basic principles and clements of carbon tax design.
Roberton Williams, University of Maryland
Overview of Carbon Taxes around the World and Principles and Elements of Carbon Tax Design
11:00 Break
4. Defining Tax Base and Tax Rates
A panel discussion on how various countries have addressed common issues related to defining a tax base and tax rates. The following issues were discussed: What gases are covered? What sources and sectors are covered? Whether fuels or emissions are taxed for CO2. Definition of baseline emissions against which covered emissions are calculated−as well as exemptions. Offsets. How rates might be differentiated across covered sources, and why, or how rates change over time.
Country Experiences: British Columbia, Norway, South Africa
British Columbia: Defining Tax Base and Tax Rates
Norway: Defining Tax Base and Tax Rates
12:30 Lunch
5. How Carbon Tax Revenues Can Be Used?
This panel discussed options that countries are opting for in terms of the use of revenues that have been generated from carbon taxes. Such options include: Cutting other taxes; Addressing distributional concerns through transitional assistance policies for households (general recycling back to households vs. focused recycling to the poor to offset impacts of higher energy prices); Debt reduction; Financing of green energy or other environmental initiatives; Rebates in trade-exposed sectors; Introducing measures to address international competitiveness−transitional assistance policies for industry.
Country Experiences: British Columbia, Norway, South Africa, UK
United Kingdom: Overview of UK Climate Change Levy (CCL)
6. Integrating Carbon Tax with a Broader Climate Change Policy
This discussion focused on coordination and interaction between carbon tax and other policies such as energy and environment. More specific, topics included: Challenges of climate change policy integration and combining carbon pricing (carbon taxes) with other mitigation instruments; Use of carbon taxes to achieve GHG mitigation targets (dovetailing absolute targets vs. relative−intensity based−targets); How carbon tax fits into existing energy tax system(s) (federal, state) and policies; Treatment of tax expenditures in regulated electricity sectors; Interactions with renewable fuels or energy efficiency mandates or subsidies.
Country Experiences: Mexico, Norway, South Africa, UK
Mexico: Integrating Carbon Tax with a Broader Climate Change Policy
15:30 Break
7. Challenges of Carbon Tax Implementation
The last panel disussion covered challenges of ensuring an enabling environment that is needed for an effective carbon tax implementation. What are the legal arrangements for the tax? What are the methods of GHG measurement/reporting and implications for demining the tax base−fuel input taxes (upstream or downstream) vs. higher tier measurement methods? Who enforces it? How are auditing/MRV issues handled? What is the capacity of the agencies that are going to do the enforcement? What is the timetable for implementation?
16:00 Country Experiences: British Columbia, Norway, South Africa, UK
8. Putting a Price on Carbon: An Emissions Trading or a Tax?
Based on their unique national circumstances and development priorities, countries opt for different carbon pricing instruments, including carbon taxes and ETSs. In this session, participants discussed key similarities and differences between the two instruments.
17:00 General discussion
18:00 Wrap up
End of workshop