| Ecotaxes

Ecotaxes are Pigouvian taxes. Their purpose is to internalise the external (environmental) costs of human activities which contribute to climate change.

Designing them requires us to consider basic issues of tax system design (identifying a tax rate, tax base, tax trigger in a manner that is equitable, neutral, simple) while keeping in mind the specific difficulties with a Pigouvian tax. For example, how should we determine the social cost of environmentally harmful behaviour and create a system that is dynamic enough to adapt to evolving information regarding such costs?

At a broader level, key debates pertain to how to address issues of inequality (inequality of exposure to climate change, inequality of contributions to climate emissions, inequality of representation in policy making etc.), in addition to debates around where to situate the tax (impacts of the existing domestic constitutional and tax system, or international agreements such as the WTO regime/ Paris Convention). This course proposes to introduce these key issues/ debates.

The teaching method employed will be a mixture of lectures and discussions. Concepts and first principles will be examined through lectures, followed by discussions on specified pre-assigned topics. The readings will include foundational readings on tax design, tax treaties, ecotaxes and climate justice.

COURSE OBJECTIVE(S):

The objectives of the course are to enable students to:

– Understand the broad principles of tax system design (issues involved in identifying a tax rate, tax base, tax trigger in a manner that is equitable, neutral and administratively simple) and Pigouvian taxes;

– Develop a broad knowledge of the kinds of ecotaxes, their scope, advantages and disadvantages.

– Develop a broad knowledge of the key debates surrounding ecotax design, including international ecotax design and the attempts towards common global standards.