In a report commissioned by Dansk Energi, Copenhagen Economics investigates how the Danish tax system in a cost effective manner can contribute to solving the challenges posed by climate change and energy security. The main conclusion is that an increased tax on greenhouse gasses and energy should be focused outside the Emission Trading System in order to be effective. Tax policy should focus on the areas where the emissions of greenhouse gasses are large and where Danish initiatives have an efficient effect on Danish and European climate goals. Especially, the tax policy should focus on the areas: individual heating, transport and agriculture. In particular, we advice against higher taxes on electricity use by consumers, bearing in mind that this energy source is already higher taxed than any other source and that it may discourage the deployment of environmentally friendly electricity driven cars.
Read the full report here
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