Taxing carbon emissions while using "green budgeting" techniques could help countries address the "twin challenges" of the pandemic and climate change, according to the OECD's Elsa Pilichowski, director of public governance, and Pascal Saint-Amans, director for tax policy and administration. In a blog post published on Oct. 29, they cited recent policy decisions that combined economic recovery and carbon taxing — including Ireland's 2021 budget, which would support people and businesses affected by the pandemic while increasing the country's carbon tax.
"The opportunity exists for tax and spending policies to be implemented in tandem, which could make green recovery measures more acceptable from a political economy perspective," Pilichowski and Saint-Amans wrote.
The concept of green budgeting involves evaluating the environmental impacts of budgetary and fiscal policies, according to the OECD. In their blog post, Pilichowski and Saint-Amans noted that France recently became the first country to issue a green budget that documented both the positive and negative impact of measures on key environmental objectives.
--Editing by Joyce Laskowski.
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