Energy use and carbon taxes
The energy model developed can be used to look at the impacts of different taxation strategies on fuel mix and carbon mix and carbon dioxide emissions. The fuel shares model provides a means of looking at interfuel substitution, and its importance com- pared with overall energy conservation. Carbon and energy taxes can be compared, along with other tax regimes such as applying the same percentage rates of tax in each country. A carbon tax would be expected to be more effective in reducing emissions than an energy tax, as it more accurately internalizes the externality. To com- pare carbon and energy taxes, two scenarios were run, corresponding to the EC proposal of US$3/bbl in 1995 rising to US$10/bbl by 2002 (in real 1990 prices), but in the first scenario wholly raised on energy and the second wholly on the carbon content of the fuel.
Energy use and carbon taxes
The energy model developed can be used to look at the impacts of different taxation strategies on fuel mix and carbon mix and carbon dioxide emissions. The fuel shares model provides a means of looking at interfuel substitution, and its importance com- pared with overall energy conservation. Carbon and energy taxes can be compared, along with other tax regimes such as applying the same percentage rates of tax in each country. A carbon tax would be expected to be more effective in reducing emissions than an energy tax, as it more accurately internalizes the externality. To com- pare carbon and energy taxes, two scenarios were run, corresponding to the EC proposal of US$3/bbl in 1995 rising to US$10/bbl by 2002 (in real 1990 prices), but in the first scenario wholly raised on energy and the second wholly on the carbon content of the fuel.
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