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4 - Public Finances and Decarbonisation

Published online by Cambridge University Press:  01 February 2024

Grégory Claeys ,
Marie Le Mouel ,
Simone Tagliapietra ,
Guntram B. Wolff  and
Georg Zachmann
Grégory Claeys
Affiliation:
Bruegel
Marie Le Mouel
Affiliation:
Bruegel
Simone Tagliapietra
Affiliation:
Bruegel
Guntram B. Wolff
Affiliation:
German Council on Foreign Relations
Georg Zachmann
Affiliation:
Bruegel
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Summary

This chapter discusses the role that fiscal policy can play in the transition to a carbon-neutral economy. In other words, it discusses how to design fiscal policy, both on the revenue and on the expenditure side, to reach net zero emissions by mid-century in a credible, growth- and distribution-friendly way. Furthermore, the chapter discusses how decarbonisation is likely to impact public finances, shedding light on what change might be required in tax revenues/expenditures, and if debt sustainability risks might arise from the green transition.

Keywords

public financesfiscal policydebtcarbon pricing
Type
Chapter
Information
The Macroeconomics of Decarbonisation
Implications and Policies
 , pp. 109 - 159
Publisher: Cambridge University Press
Print publication year: 2024

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