Ideally, a carbon tax should apply to the carbon emissions of all sectors at the same rate, according to a study by the business-oriented think-tank Tax Foundation Europe, published on Tuesday 18 June.
All Member States of the European Union plus Iceland, Liechtenstein and Norway are part of the European Union Emissions Trading System (EU ETS), a market created to trade a capped number of greenhouse gas emission allowances (see EUROPE 13435/11).
Some countries apply multiple excise duties or emissions trading schemes to sources of carbon emissions, at different implicit or explicit tax rates. In several countries, including Estonia, Finland, Latvia and Norway, the national carbon tax base overlaps with the emission base also covered by the EU ETS, leading to harmful double taxation of the overlap. When national carbon taxes apply to emissions covered by an emission allowances trading system, they tend to shift the emissions to sources outside of their tax base, leaving total emissions capped by ETS allowances unchanged.
Read the report: https://aeur.eu/f/crt (Original version in French by Anne Damiani)