OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Global Effects of the European Carbon Tax

The aim of this paper is to analyse the implications of the European Commission proposal of a mixed energy cum carbon tax to curb CO2 emissions from a global perspective. The paper deals with the effects of this proposal on emissions and welfare in both the EC and the rest of the world by concentrating on three main issues: i) the effectiveness of the proposed tax measures in terms of curbing EC and global CO2 emissions; ii) the implied costs for the EC and the other countries/regions of the world; and iii) the implications of the EC proposal for the world distribution of emissions and the competitiveness of the EC economy. In this connection, the relevance of the so-called "carbon leakages" -- i.e. the displacement of polluting activities from countries participating in an emission reduction agreement to countries not concerned by the agreement -- is examined. The paper provides quantitative answers to these issues using simulations with GREEN, the global dynamic applied general ...


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