A Public Finance Perspective on Climate Policy
Report

A Public Finance Perspective on Climate Policy

Six Interactions That May Enhance Welfare

Jan Siegmeier, Linus Mattauch, Max Franks, David Klenert, Anselm Schultes and Ottmar Edenhofer
FEEM, 2015
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Editorial Rating

8

Qualities

  • Innovative

Recommendation

Climate policy impinges on public finance, particularly in the ways governments pay for alternative energy solutions and climate change mitigation, as well as in how they handle green tax revenues. Researchers Jan Siegmeier, Linus Mattauch, Max Franks, David Klenert, Anselm Schultes and Ottmar Edenhofer detail how countries’ environmental plans can affect their fiscal regimes, including through taxation, income inequality and intergenerational transfers of costs and benefits. getAbstract recommends this creative and thoughtful exploration of options in tackling climate and budget issues to policy makers, fiscal analysts and economists.

Summary

Analysts generally model fiscal and climate policies separately, but environment plans and public finance are two sides of a coin. Because green taxes can generate substantial sums for governments, the added income can affect budgets and, hence, policy. Examples of the “double dividend” – as, for instance, when an environmental levy results in more jobs that lead to new income tax revenue – have already breached the wall separating climate and public policy development and analysis. Climate measures can improve fiscal and social welfare in six ways:

  1. “Reduced international tax competition...

About the Authors

Jan Siegmeier et al. are affiliated with the Technische Universität Berlin.

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