IMF (International Monetary Fund)
"Fiscal policies are key to efficiently mobilizing both public and private sources of finance, while the need to adapt economies to climate change raises issues that have implications for the design of national tax and spending systems (for example, strengthening fiscal buffers and upgrading infrastructure in response to natural disaster risks).
For reducing carbon emissions (‘mitigation’), carbon pricing (through taxes or trading systems designed to behave like taxes) should be front and center. These are potentially the most effective mitigation instruments, are straightforward to administer (for example, building off fuel excises already commonplace in most countries), raise (especially timely) revenues for lowering debt or other taxes, and establish the price signals that are central for redirecting technological change towards low-emission investments.
Productive use of this revenue critical for containing the overall costs of carbon pricing for the economy. Revenues could be used for lowering taxes on labor and capital that distort economic incentives, producing a counteracting economic benefit to the costs of higher energy prices"
"Tax reforms could increase potential growth, enhance fairness, and improve efficiency. Despite progress in recent years, the Dutch tax and benefit system remains unbalanced; large efficiency gains could be achieved by shifting the tax burden away from labor, and towards consumption and capital income".
"For most environmental problems, well-designed fiscal policies (emissions taxes or their cap- and-trade equivalents with allowance auctions) are the most natural instruments for incorporating environmental damages into the price of products and non-market activities (like driving)."
“Several factors point to continued momentum for environmental tax reform. One is pressure for new revenues to strengthen fiscal positions. Another is growing acceptance among policymakers that emissions pricing instruments are far more effective at exploiting the entire range of emissions reduction opportunities than are regulatory approaches. Swapping environmental taxes (that apply to traded goods) for labor taxes might also be means to improve competitiveness. And environmental problems are of growing concern, from rising greenhouse gas (GHG) concentrations to deteriorating urban air quality in industrializing nations to increasing congestion (a related externality) of transportation systems."
- From: D Heine et al (2012) Environmental Tax Reform: Principles from Theory and Practice to Date, IMF Working Paper WP/12/180.
'Fiscal instruments (carbon taxes or similar) are the most effective policies for reflecting environmental costs in energy prices and promoting development of cleaner technologies, while also providing a valuable source of revenue. Fiscal policies also have an important role to play in addressing other major environmental challenges, like poor air quality and urban congestion.'
'Broad-based charges on greenhouse gas emissions, such as a carbon tax, are the most effective instruments for reducing emissions throughout the economy.’
- From: IMF (2013) Factsheet Climate, Environment, and the IMF.
'Ideally, carbon prices are applied in proportion to the carbon content of fuels as they enter the economy (...). The costs of comprehensive carbon pricing is initially modest if revenues are used productively. Productive revenue uses include reducing taxes on work effort'.
- From: IMF (2012) Fiscal Policy to Mitigate Climate Change. A Guide for Policymakers. Pre-publication copy. Editors: Ruud de Mooij, Ian W.H. Parry, and Michael Keen.
"Getting the prices right means using fiscal policy to make sure that the harm we do is reflected in the prices we pay. I am thinking about environmental taxes or emissions trading systems under which governments issue—and preferably sell—pollution rights. It is basically a variation of the old mantra: “you break it, you buy it”."
"As we move forward, there is much work to be done at the technical level, in terms of the appropriate design of taxes and tax-like instruments to get the prices right. The IMF will play an active role in this. (...) we will be talking about the use of fiscal policy, and reform of energy subsidies, to promote green growth."
- From: International Monetary Fund (2012) Back to Rio—the Road to a Sustainable Economic Future, Speech by Christine Lagarde, 12th June 2012.
'Climate change is a global externality problem, calling for some degree of international fiscal cooperation.'
- From: IMF (2008) The Fiscal Implications of Climate Change.