Carbon-energy taxation

When taxes are introduced on energy and CO₂ emissions, and the income is used to reduce other taxes, a positive effect is achieved both for the environment and for the economy. Economists from Cambridge Econometrics have, in an EU research project coordinated by the National Environmental Research Institute, University of Aarhus, shown that the ’double dividend’ theory can no longer be rejected in practice. In five EU countries, CO₂ and energy taxation over the last 17 years has made a small but positive contribution to economic growth of up to 0.5 per cent, at the same time as CO₂ emissions have been reduced.

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