How can tax policy help us get to net zero?

COP 26 has brought heightened focus on environmental matters and the steps we need to take to get to net zero. But to what extent does tax policy have a role to play in reaching this target? Here are ten things I have learned from recent developments and publications in this area.

1. Carbon pricing works but it needs to be better

Carbon pricing involves putting a price on the emission of greenhouse gases which is intended to incentivise a reduction in carbon-intensive activities and encourage investment in the development and use of emission-saving technologies. This can take the form of explicit carbon prices (such as carbon taxes and emissions trading systems) and implicit pricing (for instance through fuel duties or regulations that discourage carbon intensive activities or subsidies for cleaner technologies). There is a...