Cover Selected Issues Papers
Fiscal Policy Options to Accelerate Emissions Reductions in Belgium: Belgium
Author:
Nate Vernon
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Series:
Selected Issues Papers
Volume/Issue:
Volume 2023: Issue 017
Language:
English
Publication Date:
02 Mar 2023
DOI:
https://doi.org/10.5089/9798400235795.018
ISBN:
9798400235795
ISSN:
2958-7875
Pages:
41
Keywords:
Environmental taxes and subsidies; fiscal policy; environmental economics; distributional effects; climate; ETS price; fiscal policy option; sectoral policy; B. EU; Policy recommendation; emissions reduction package; Greenhouse gas emissions; Carbon tax; Electricity; Natural gas sector; Global; Europe
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IMF Selected Issues Papers are prepared by IMF staff as background documentation for periodic consultations with member countries. It is based on the information available at the time it was completed.
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Belgium’s current policies fall short of achieving its climate targets and promoting emissions reductions at limited economic costs. We recommend that domestic carbon pricing form the centerpiece of an emissions reduction package, as pricing promotes mitigation at the lowest economic cost, can be phased in as international energy prices fall, and generates revenue to compensate vulnerable households and reduce taxes on productive activities. Sectoral policies, such as subsidy-tax schemes to promote low emissions vehicles, should reinforce carbon pricing and regional efforts, while the social protection system can be made more efficient and environmentally friendly by switching from energy subsidies to income-based support. Belgium should also promote dialogue at the EU-level to harmonize ETS prices and include all sectors under a single trading scheme.

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Cover Selected Issues Papers
Selected Issues Papers
Publisher:
International Monetary Fund
Volume 2023: Issue 017