A proposition for a multilateral carbon tax treaty.
In my doctoral thesis, I propose a Multilateral Carbon Tax Treaty that would tax carbon on an extractive basis, and account for the in natura consumption of carbon rich by-products by taxing carbon at the earliest possible moment. In the fossil fuel production chain, for example, that would be at the upstream level.
The proposal for a multilateral carbon tax treaty (MCTT) is novel, in that it draws a proposed carbon tax rate and tax base from existing country practice, and derives a system for multilateral taxation from the existing environmental agreements, such as the United Nations Framework Agreement on Climate Change, the Kyoto Protocol and the Paris Agreement. The thesis demonstrates how the MCTT would fit into the existing environmental legal framework, as well as in the international trade framework through the GATT and the WTO system. The thesis delves on all the potential legal problems that might arise from the administration of a multilateral excise tax, and makes design recommendations, that are indispensable for the tax to be admitted from the environmental, fiscal and trade perspectives.
The thesis thus addresses the following issues:
• What tax would be most appropriate instrument to capture and price carbon emissions ;
• What would be the best framework to propose a multilateral environmental tax;
• What would be the best instrument to support an environmental tax applied under those terms;
• Whether the tax would be consistent with international trade regulations; and
• Which would be the most suitable intergovernmental organization to administer the aforementioned tax.
A template for negotiation of a Multilateral Carbon Tax Treaty, should that ever come to be a goal intended by countries, is proposed at the end of the thesis.