A future for carbon taxes

Carbon taxes have been frequently advocated as a cost-effective instrument for reducing emissions. However, in the practice of environmental policies, only six countries have implemented taxes based on the carbon content of t he energy products. In this paper, we evaluate carbon taxes with regard to their competitiveness, distributional and environmental impacts. The eviden ce shows that carbon taxes may be an interesting policy option and that the ir main negative impacts may be compensated through the design of the tax a nd the use of the generated fiscal revenues. (C) 2000 Elsevier Science B.V. All rights reserved.