WASHINGTON, July 31 Energy taxes in much of the
world are far below what they should be to reflect the harmful
environmental and health impact of fossil fuels use, the
International Monetary Fund said in a new book on Thursday.
For the first time, the IMF laid out exactly what it views
as appropriate taxes on coal, natural gas, gasoline and diesel
in 156 countries to factor in the fuels' overall costs, which
include carbon dioxide emissions, air pollution, congestion and
Under its chief, Christine Lagarde, the IMF has delved into
the impact of climate change, arguing that tackling the fund's
core mission of economic instability is impossible without also
addressing environmental damage.
At the book's launch in Washington, Lagarde said countries
should not have to wait for global agreement on climate
policies, and instead should move ahead in adjusting energy
prices on their own.
Nations are now working on a United Nations deal for late
2015 to rein in greenhouse gas emissions that have hit repeated
highs this century, but progress has been slow as nations fret
about the impact any measures could have on economic growth.
The IMF's book argues higher energy taxes should not hurt
growth if done right.
"On this point, let me be crystal clear: we are generally
talking about smarter taxes rather than higher taxes," Lagarde
said, according to prepared remarks for the launch of the book.
She said higher energy taxes are the most efficient and
simple way of dealing with environmental harm and would allow
governments to stop relying on a "patchwork" of other
uncoordinated policies to deal with climate change, such as
subsidies for renewable energy.
Higher energy prices would prompt people to shift to cleaner
fuels or more fuel-efficient vehicles on their own, Lagarde
said, adding that they could also allow governments to lower
other taxes on consumption or income to reduce the burden on
people, or pay down more public debt.
The IMF estimates implementing efficient energy taxes would
reduce deaths from fossil fuels by 63 percent, cut carbon
emissions by 23 percent, and raise revenues by 2.6 percent of
GDP for the world as a whole.
The IMF has made a big push in recent years for countries to
rein in energy subsidies, which it says hurt the environment
while rarely helping the most vulnerable and eating up valuable
government funds that could be put to better use elsewhere.
"But we need to go well beyond the elimination of direct
cash subsidies, and make sure that energy tax systems around the
world properly reflect environmental side effects," Lagarde said
in prepared remarks for the event on Thursday.
(Reporting by Anna Yukhananov; Editing by Paul Simao)