Transitioning to Clean Energy - An Overview of Energy Taxes in BRICS

Abstract

Two years after the Paris Agreement on Climate Change (the ‘Paris Agreement’) entered into force, most signatory countries are faltering in achieving the pledges they made to reduce GHG emissions. The BRICS grouping is no exception, with all member countries falling among the top 20 fossil fuel emitters globally. Environmental taxes (of which energy tax is one example) may be one of the most cost effective methods of improving energy efficiency, reducing energy use and moving to clean energy. In other words, energy taxes could have an important role to play in helping the BRICS countries meet their Paris Agreement targets. Indeed, the OECD’s latest report on energy taxation calls for governments to enhance their use of energy taxes as a means of curbing GHG emissions and air pollution. Consequently, this paper examines the energy landscape and structure of energy taxation in each of the BRICS countries. Although BRICS nations differ in terms of their energy mix and energy intensity, this paper identifies some common features of energy taxes which could serve as a useful tool in helping countries to transition to clean energy.