This paper serves as explanatory notes to the development of a text for a climate treaty to tax carbon on a global basis – a Multilateral Carbon Tax Treaty (MCTT). Several leading practitioners and academics in their respective fields provided inputs to drafting the MCTT.
The MCTT comes at a crucial point in history. There are recurrent requests to establish a global taxation regime, or a cooperative solution, to transition away from fossil fuels as the main source of energy supply. The momentum for change comes from: (a) a growing number of initiatives from countries with a history of furthering carbon pricing instruments that foster climate mitigation goals, and (b) growing pressure from countries now severely impacted by the effects of climate change, potentially compromising their very existence. The MCTT is put forward as the instrument capable of making the first of many moves towards equitable change. It takes into account the economic capabilities of each country through the implementation of differentiated carbon tax rates.
Summary of ICTD Working Paper 187.
