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FROM VOLUME 5, NUMBER 4, APRIL 1992

NEWS...
CARBON TAX ANALYSES

Item #d92apr110

The European Community continues to evaluate the need for, and effects of, a carbon/energy tax to meet its commitment to reduce CO₂ emissions, and similar studies are being done in the U.S. The following articles mention some recent evaluations of the impacts of a tax, most of which are listed in Reports, this issue.

"Carbon Tax Could Stimulate Economy if Revenue Used for Tax Credits.." Intl. Environ. Rptr., pp. 161-162, Mar. 25, 1992. A draft report prepared for the U.S. Environmental Protection Agency by the consulting firm DRI/McGraw Hill concludes, contrary to previous federal agency analyses, that a carbon tax would reduce CO₂ emissions while boosting the economy in the long term, if revenues were used to credit business investment. This agrees with findings of a U.S./European study by the International Project on Sustainable Energy Paths (IPSEP), funded by the Dutch government. The IPSEP study is contrasted with previous studies of carbon taxes in Energy, Econ. & Clim. Change, pp. 7-8, Mar. 1992.

"Europeans Debate Macro-Economic Effects of Energy/CO₂ Tax," Energy, Econ. & Clim. Change, pp. 2-5, Feb. 1992. A detailed analysis focusing on two reports completed for the EC by the firm DRI, which do little to settle arguments over the proposal.

"Tempers Flare over European Carbon/Energy Tax," ibid., p. 16, Mar. EC Environment Commissioner Ripa di Meana insisted in a news conference that he will not participate in the Rio Earth Summit if the tax proposal and other measures are endorsed.

"Cold Feet over Carbon Tax?" F. Biedermann, Chem. & Indus., p. 164, Mar. 2, 1992. Discusses two Dutch studies. One about to be released evaluates whether the Netherlands can implement its own carbon tax even if the EC does not (see also Intl. Environ. Rptr., p. 130, Mar. 11). The other, commissioned by the EC, evaluates the cost and effectiveness of the EC tax proposal.

"Fossil Fuel Levy Alternative Proposed," ibid., p. 126, Feb. 17. Testimony before a British House of Lords committee claims that a small tax on fossil fuels, used to fund energy efficiency measures, could have the same result as the hefty carbon tax proposed by the EC.