Monday, September 08, 2014

Fiscal Policy to Address Energy’s Environmental Impacts


Countries should reflect health, environmental costs of fuel use in energy prices
Setting appropriate charges on energy use could allow other taxes to be cut
Reforms can be initiated by finance ministers, need not await global action


Fiscal policies should be center stage in getting energy prices to reflect the harmful and environmental side effects associated with energy use, according to a new report released by the IMF.
Energy prices in many countries are wrong because they are set at levels that do not reflect environmental damage, notably climate change, air pollution, and various side effects of motor vehicle use, such as traffic accidents and congestion. Whether on energy or any other product, prices should provide consumers with an accurate assessment of the actual costs associated with the product.

See full Press Release: http://www.imf.org/external/pubs/ft/survey/so/2014/POL073114A.htm