Why this book?

This book proposes a multilateral framework through which countries may tax mineral resources (oil, gas and coal) and capture the full polluting potential of those energy resources through the tax. The framework is designed so that the tax is only levied once through the mineral resources’ production chain. A compensation mechanism is proposed to account for non-combusted carbon by-products.

The book thus addresses the following issues:

• which type of tax is the most appropriate to capture oil, gas and coal’s polluting ability;
• what the best framework is to propose a multilateral environmental tax;
• what the best legal instrument is to support an environmental tax applied under the defined terms;
• the compatibility of the proposed tax with international trade regulations; and
• what the most suitable intergovernmental organization is to host the legal instrument and to administer the aforementioned tax.

The research draws from the existing principles of environmental regulations and international environmental agreements (e.g. UN Framework Convention on Climate Change, the Kyoto Protocol and the Paris Agreement) to place the proposed Multilateral Carbon Tax Treaty within the framework of environmental protection and establish a dialogue between the environmental legal framework and the proposed tax instrument of resource mobilization. The book further explains why the Paris Agreement has provided the international community with the right momentum for a new tax framework to be adopted within the dual context of tax and environmental law.

Another important feature of the framework proposed is the establishment of how and where the proposed multilateral framework should be inserted within the existing intergovernmental structures. The book thus analyses the engagement of each of the main intergovernmental organizations (the United Nations, OECD and World Trade Organization) in the topic of environmental regulation and places the multilateral instrument within this framework.

The legitimacy of the tax, as well as the revenue destination, is addressed from tax, trade and environmental perspectives, covering all angles of admissibility of the tax. Suggested tax rates and tax bases are drawn from existing country practices. Finally, a template for the negotiation of the Multilateral Carbon Tax Treaty is included at the end of the book.

Suggested tax rates and tax bases are drawn from existing country practices. A template for the negotiation of the Multilateral Carbon Tax Treaty is included at the end of the book.

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This book is part of the IBFD Doctoral Series

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Author(s)

Tatiana Falcão (LLM, University of Cambridge and LLM, New York University) is the Green Fiscal Policy Network manager at the United Nations Environment Programme, in partnership with the International Monetary Fund and GIZ, and a Policy Leader Fellow at the School of Transnational Governance at the European University Institute. She was previously an economic policy adviser at the United Nations with the Secretariat of the Committee of Experts on International Cooperation in Tax Matters. She is a member of the UN subcommittee on environmental taxation.

Ms Falcão obtained her PhD in Law and Economics from Wirtschaftsuniversität Wien (Vienna University of Economics and Business) under the supervision of Prof. Michael Lang. She was a Research Fellow at IBFD while writing her PhD thesis.