This paper evaluates energy tax reform in The Netherlands between 1988 and 2002 from a climate change perspective. In particular, the introduction of two (indirect) taxes on energy products is now responsible for a considerable amount of tax revenue from a green tax base. The paper discusses the energy tax base and rate structure from a modern Pigovian tax perspective and illustrates the practical difficulties involved in the indirect and non-uniform taxation of emissions. Also further improvements of the energy tax structure are discussed, such as a better targeting of the energy tax base and tax rate to fuel characteristics.

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Ecological Economics
Erasmus School of Economics

Vollebergh, H. (2008). Lessons from the polder: Energy tax design in The Netherlands from a climate change perspective. Ecological Economics, 64(3), 660–672. doi:10.1016/j.ecolecon.2007.04.011