The Role of Fiscal Instruments in Environmental Policy
37 Pages Posted: 22 Jul 2009
Date Written: July 2009
Environmental protection is one of Europe's key values. The EU has set clear policy objectives to achieve its environmental goals. The EU has favoured market-based instruments, among which fiscal instruments to tackle the climate change problem. This paper takes a policy-making perspective and provides an overview of key issues on the role of fiscal instruments in energy and environmental policies. It describes fiscal instruments as cost-effective means to promote environmental goals and highlights in which cases taxes and other types of fiscal instruments can usefully complement each other to achieve environmental target.
Keywords: taxation, environmental policy, VAT, fiscal incentives
JEL Classification: H23, Q38, Q48, Q58
Suggested Citation: Suggested Citation