Upon completion of this course, participants will be able to:

• Explain the economic rationale for environmental taxation (Pigouvian principle) and its effectiveness.
• Design a practical carbon tax mechanism, addressing rates, coverage, and point of taxation.
• Analyze the potential economic and social incidence of environmental taxes (distributional effects).
• Develop strategies for revenue recycling (e.g., lump-sum transfers, tax cuts) to ensure public acceptance.
• Evaluate the trade-offs between different environmental policy instruments (taxes vs. cap-and-trade).
• Understand the role of green fiscal reform in supporting climate mitigation and adaptation goals.
• Examine international experiences and best practices in implementing environmental tax reforms.
• Identify opportunities for using tax incentives (e.g., tax credits) to promote green investment.

• Environmental Policy Analysts and Economists
• Officials in Ministries of Finance, Environment, and Energy
• Climate Policy and Sustainability Specialists
• Tax Policy Advisors focused on Green Economy Initiatives
• Legislative Staff and Parliamentary Researchers
• NGO and Think Tank Professionals focusing on Climate Finance

• Quantitative exercises on calculating the optimal Pigouvian tax rate (Individual Exercises).
• Group debate on the pros and cons of a carbon tax vs. a cap-and-trade system.
• Case studies of successful and failed national environmental tax implementations.
• Policy memorandum drafting on managing the distributional impact of a fuel tax increase.
• Simulated public consultation on a proposed plastic levy.

Unit 1: The Economics of Environmental Taxation

• Defining environmental externalities and the concept of social cost
• The Pigouvian tax principle: optimal tax rate setting and efficiency
• The "double dividend" hypothesis of environmental taxation
• Comparing command-and-control regulations with market-based instruments

• Taxation of energy and carbon emissions: design considerations
• Taxes on pollution, waste, and resource extraction
• Ecotaxes on specific products (e.g., plastic levies, single-use items)

Unit 2: Design and Implementation of Carbon Pricing

• Determining the tax base (upstream vs. downstream taxation)
• Setting the carbon price and adjusting for existing energy taxes
• Sectoral coverage and the treatment of trade-exposed industries
• Designing border carbon adjustments (BCAs) to maintain competitiveness

• Options for recycling carbon tax revenue (e.g., lowering income/corporate taxes)
• Analyzing the regressive impact on low-income households
• Compensatory measures and targeted transfers to vulnerable groups

Unit 3: Green Fiscal Reform and Competitiveness

• Shifting the tax burden from labor/capital to environmentally harmful activities
• Case studies of comprehensive green tax reforms in European countries
• The role of tax incentives (credits, accelerated depreciation) for green technology

• Assessing the impact of environmental taxes on national industrial competitiveness
• Addressing carbon leakage and emission shifting to other jurisdictions
• Exemptions and rebates for energy-intensive, trade-exposed industries (EITEs)

Unit 4: Sectoral and International Dimensions

• Taxation of the transport sector (fuel taxes, road pricing, vehicle registration)
• Tax policies for sustainable water use and management
• Incentivizing waste reduction and circular economy models through taxation

• International agreements and the coordination of carbon pricing efforts
• The role of the IMF, World Bank, and OECD in promoting green fiscal policy

Unit 5: Evaluation and Policy Acceptance

• Establishing environmental effectiveness indicators for eco-taxes
• Assessing the long-term economic and behavioral impacts

• Managing public and industry resistance to new environmental taxes
• Building a coalition and communication strategy for reform acceptance