Carbon Pricing Progress Hindered by Fuel Tax Cuts, OECD Says

Carbon pricing mechanisms are seeing wider usage worldwide, but progress is being limited by significant untargeted fuel cuts, according to the Organization for Economic Cooperation and Development.

Most OECD member countries saw their tax rates in the road transport sector decrease between 2021 and 2023, driven by governments reacting to pre-tax price hikes to energy and high inflation, according to a report released by the organization Monday. The report noted the decrease is eroding carbon pricing signals meant to drive changes in behavior.

• “The size of these cuts are quite important, equivalent to 50 euro/per tonne of CO2. It’s a ...