Foreword

This report was prepared by the Tax Policy and Statistics division of the OECD’s Centre for Tax Policy and Administration. It is unique in its comprehensive take on effective carbon pricing, integrating price signals that result from fuel excise taxes, carbon taxes and emissions trading systems into effective carbon rates.

This is the second report in the OECD series on Carbon Pricing and Energy Taxation. The report covers 72 countries increasing coverage relative to the first report in the series, Pricing Greenhouse Gas Emissions: Turning Climate Targets into Climate Action, encompassing all emissions trading systems in place in 2021. It provides an in-depth analysis of emissions trading systems in 2021 as well as of two common features of this carbon pricing instrument: free allocation and price stability mechanisms. Additionally, given the effect of the energy crisis and high inflation rates on the recent policy landscape, the evolution of emissions trading systems, fuel excise taxes and carbon taxes in 2022 and 2023 is analysed as well.

Detailed data on Effective Carbon Rates (ECR) are available for 45 OECD and G20 countries on the OECD website, for 2012, 2015, 2018 and 2021.

The project was led by Anasuya Raj under the guidance of Assia Elgouacem and the overall responsibility of Kurt Van Dender. The report was drafted by Anasuya Raj, with inputs from Konstantinos Theodoropoulos. Database design is by Konstantinos Theodoropoulos and the Effective Carbon Rates model was updated and implemented by Anasuya Raj. Information on 2021 carbon prices that result from taxes was obtained from the OECD’s Taxing Energy Use database, which was recently updated by Jonas Teusch, Konstantinos Theodoropoulos and Astrid Tricaud. Information on emissions trading systems already implemented in 2021 was collected and processed by Anasuya Raj and Konstantinos Theodoropoulos. Information for emissions trading systems which have newly been implemented, have just been approved or for which a mandate has been established, was collected and processed by Anasuya Raj and Astrid Tricaud. Information on effective carbon tax rates in the road transport sector for 2022 and 2023 was collected by Bethany Millar-Powell, Konstantinos Theodoropoulos and Astrid Tricaud and processed by Anasuya Raj.

The authors would like to thank OECD colleagues David Bradbury, Luisa Dressler, Assia Elgouacem, Jane Ellis, Mathilde Mesnard, Dirk Röttgers, Jonas Teusch and Kurt Van Dender for their feedback and advice at different stages of the production of the report. They would also like to thank Arnau Risquez Martin and Nicolas Coent for providing timely energy-use data without which the update of the ECR database to 2021 would not have been possible. Karena Garnier, Hazel Healy, Rebekka Hviid Kanstrup, Michael Sharratt, Violet Sochay, Carrie Tyler and Antonia Vanzini improved the presentation and dissemination of the work.

The OECD Secretariat would like to thank the delegates of the Joint Meetings of Tax and Environment Experts, and their colleagues in national government administrations for their assistance with the provision of data, for their feedback on the data and the report, and for their support for the area of work.