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IMF URGES HIGHER ENERGY TAXES TO FIGHT CLIMATE CHANGE

08/04/2014

According to the International Monetary Fund (IMF), energy taxes in most of the world are much lower than they should be to reflect the detrimental environmental and health impacts of fossil fuel use. In a new book released last week, the IMF laid out what it sees as appropriate taxes on coal, natural gas, gasoline, and diesel for 156 countries. The publication takes into account the fuels’ overall costs, including carbon dioxide emissions, air pollution, congestion, and traffic accidents. At the book’s launch in Washington, DC, IMF managing director Christine Lagarde stated that higher energy prices are the most effective way of dealing with environmental harm. She argued that increased prices would encourage people to shift to cleaner fuels and more efficient vehicles on their own, allowing governments to stop relying on a “patchwork” of unreliable environmental policies. She also emphasized that, if done right, high energy taxes should not hurt economic growth. The IMF estimates that establishing efficient energy taxes could reduce deaths associated with fossil fuels by 63% and cut carbon emissions by 23%. For the full story, see http://uk.reuters.com/article/2014/07/31/us-imf-energy-taxes-idUKKBN0G01VD20140731 and http://www.imf.org/external/np/speeches/2014/073114.htm.