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Rouven Stubbe

Reforming CO2-Taxation: Current proposals and outlook

CO2 taxation in Ukraine is currently too low to achieve sustainable emission reductions. Various reform options are being discussed in the economic policy debate, but they all have a strong focus on revenue generation, rather than on energy and environmental policy control effects.

  • Ukraine
NL 153 | July 2021
Energy and Climate

Ukraine’s current CO2 tax is too low to bring about emission reductions. Discussions about increasing the CO2 tax are ongoing. However, so far they are less about decarbonisation and achieving effective tax rates, and more about revenue generation and its fiscal use. In light of international discussions and commitments, several state actors are preparing proposals to introduce a national climate fund that could channel CO2 tax revenues into green industrial upgrading. Another proposal is to finance feed-in tariffs for renewable electricity through CO2 tax revenues instead of a consumer levy. Overall, the course and ambitions of Ukraine’s climate policy remain unclear, leading to uncertainty among investors, businesses and decision-makers.

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