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Carbon Taxes

Taxing ‘public bads’ and investing in ‘public goods’: Constructive tax policies can help prevent harm and help promote progress

Christopher Colford's picture
To tax, or not to tax? That is the question that preoccupied a thought-provoking panel at a recent World Bank Group conference on “Winning the Tax Wars” – along with such pragmatic policy questions as: What products and behaviors should be taxed, aiming to discourage their use? How heavily should taxes be imposed to penalize socially destructive behaviors? If far-sighted, behavior-nudging taxes are indeed adopted, where should the resulting public revenue be spent?

Before memories start to fade about a stellar springtime conference – at which several of the Bank Group’s Global Practices (including those focusing on Governance and on Health, Nutrition and Population) assembled some of the world's foremost authorities on tax policy – it’s well worthwhile to recall the rigorous reasoning that emerged from one of the year’s most synapse-snapping scholarly symposia at the Bank.

Subtitled “Protecting Developing Countries from Global Tax Base Erosion,” the conference focused mainly on the international tax-avoidance scourge of Base Erosion and Profit-Shifting (BEPS). Coming just one week after a major conference in London of global leaders – an anti-corruption effort convened by Prime Minister David Cameron of the United Kingdom – the two-day forum in the Preston Auditorium built on the fair-taxation momentum generated by the recent Panama Papers disclosures. Those leaks about international tax-evasion strategies dominated the global policy debate this spring, when they exposed the rampant financial conniving and misconduct by high-net-worth individuals and multinational corporations seeking to avoid or evade paying their fair share of taxes.
 
The Bank Group conference, however, explored tax-policy issues that ranged far beyond the headline-grabbing disclosures about the scheming of rogue law firms and accounting firms, like the now-infamous Panama-based Mossack Fonseca and other outposts of the tax-dodging financial-industrial complex. Conference-goers also heard intriguing analyses about how society can levy taxes on “public ‘bads’ ” to promote investment in “public ‘goods’ ” – as part of the broader quest for broad-scale tax fairness.
 
"Winning The Tax Wars" via revenue-raising strategies

Carbon Taxes and Investment in Public Transport

Stéphane Hallegatte's picture


This is part of a series of blogs focused on the Sustainable Development Goals and data from the 2016 Edition of World Development Indicators.

Between 1990 and 2013 worldwide energy use increased by about 54 percent, more than the 36 percent increase in the global population. Access to energy is fundamental to development, but as economies evolve, rising incomes and growing populations demand more energy.  Sustainable Development Goal 7 seeks to ensure access to affordable, reliable, sustainable and modern energy for all and achieving this will require increasing access to electricity, the take-up of clean fuels and renewable energies, and energy efficiency.

Infrastructure planning today determines what carbon taxes can accomplish tomorrow

Stéphane Hallegatte's picture


By Liliana D. Sousa


It might be surprising, but the majority of Central American households receive electricity subsidies, benefiting up to 8 out of 10 households in some cases. Without a doubt, this provides many poor and low-income families with access to affordable electricity.