OECD Information for journalists, Developing countries could raise much-needed public revenues, while cutting emissions and air pollution, by making better use of energy taxes and reducing energy subsidies, according to a new OECD report.
Better use of energy taxes could strengthen developing country finances while cutting pollution, says OECD
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Developing countries could raise much-needed public revenues, while cutting emissions and air pollution, by making better use of energy taxes and reducing energy subsidies, according to a new OECD report.
Taxing Energy Use for Sustainable Development: Opportunities for energy tax and subsidy reforms in selected developing and emerging economies examines energy taxation in 15 developing and emerging economies in Africa, Asia and Latin America and the Caribbean.
The report finds that well-designed energy and carbon taxes can strengthen efforts to improve domestic revenue mobilisation. While the revenue potential varies across countries, the report finds that, on average, the countries could generate revenue equivalent to around 1% of GDP if they set carbon rates on fossil fuels equivalent to EUR 30 per tonne of CO
Highlights
The Commodity Futures Trading Commission (CFTC) issued a report in September 2020 highlighting the risk that climate change poses to the stability of the U.S. financial system and the economy. The report, Managing Climate Risk in the U.S. Financial System, was a detailed study of the topic that will provide insights to the Biden Administration s team of regulators.
The CFTC report emphasized that regulators have sufficient existing legislative authority to begin addressing climate-related risks now, through better oversight, risk management and disclosures.
Major findings in the report include: 1) More consistent, reliable and comparable data is needed to make this task meaningful and manageable, 2) regulators and companies can use scenario planning and climate stress testing to reduce climate risks, and 3) an economy-wide price on carbon would allow financial markets to help reduce greenhouse gas emissions more efficiently.