70% of CO₂ energy emissions from OECD and G20 are not taxed (OECD)

According to a new OECD report focusing on 44 advanced and emerging economies (OECD and G20 plus Colombia) representing for over 80% of energy-related CO₂ emissions, 70% of these emissions are entirely untaxed, providing no incentive to transition to cleaner energies.

Taxation on road fuel is relatively high yet rarely fully reflect the cost of its CO₂ emissions, especially with some road transport sectors offered preferential rates. Coal, which accounts for almost 50% of CO₂ emissions from energy, is not taxed or at a very low level in most studied countries. The tax level is usually higher on natural gas, which emits less CO₂ than coal. The use of fuel for international flights and shipping is not taxed, meaning long-haul frequent flyers and cargo shipping firms don’t pay for their energy-related emissions.

97% of energy-related CO₂ emissions outside of road transport are taxed far below levels that would reflect the costs on the environment. Only four countries, namely Denmark, the Netherlands, Norway, and Switzerland, charge non-road energy above €30/tCO₂, which considered a low-end estimate of the costs to the climate of CO₂ emissions.

While energy taxes tend to stagnate (some considered countries have even reduced energy taxes in recent years), state support to fossil fuel production and use in the 44 countries studied by the OECD was US$140 bn in 2017, with subsidies increasing in some economies.