This paper provides an overview of energy and (implicit) CO2 taxation in the EU member countries. Against the background of the EU energy taxation directives, energy and implicit CO2 tax rates in the EU countries are discussed, focussing on taxation in the transport sector as a major non-ETS emitter. Empirical evidence on the impact of energy and carbon taxes on energy use and emissions is presented and the economic and distributional effects of energy and carbon taxes are then discussed. Research on energy price elasticities suggests that energy and carbon taxation can make a significant contribution towards achieving emission reductions, particularly in the transport sector where greenhouse gas emissions continue to be on the rise in the EU. Evidence on the economic impacts of energy and carbon taxes furthermore shows that a double divided can be achieved. With respect to the distributional impacts of carbon and energy taxes evidence is, however, mixed. While empirical studies generally negate regressive effects for taxes on transport fuels, energy and carbon taxes on heating fuels tend to be found regressive.
Energy taxation carbon taxation EU Member States environmental impact macroeconomic effects distributional effects