Taxing Energy Use 2018

Companion to the Taxing Energy Use Database

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Emissions from energy use cause environmental and health damages and they also contribute to climate change. By charging for these damages, taxes on energy use can reduce excessive emissions, while raising revenue that can be used to fund vital government services.

This report assesses the magnitude and coverage of taxes on energy use - carbon taxes and other specific taxes on energy use - in 2015, across different countries and selected country groups, six sectors and five main fuel groups. It also considers change in effective tax rates on energy use between 2012 and 2015. The analysis is based on the OECD’s Taxing Energy Use database, a unique dataset to compare coverage and magnitude of specific taxes on energy use across 42 OECD and G20 economies, which together represent approximately 80% of global energy use and CO2-emissions associated with energy use.



Executive summary

Many forms of energy use are associated with environmental and health damages and contribute to climate change, so the social cost of energy use frequently exceeds private cost. Taxes on energy use – carbon taxes and other specific taxes on energy use – can make energy users pay for the full costs of pollution and climate change, so reducing harmful emissions at minimal cost, while also raising revenue that can fund vital government services. These considerations may affect policy design to an extent, but this report clearly shows that energy taxes continue falling well short of their potential to improve environmental and climate outcomes.


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