IEB Report

Public Policies

Cities, Taxation and Climate Change

IEB Report 1/2020: Cities, Taxation and Climate Change

What we today understand as being a climate emergency represents a threat to the well-being of people around the world. According to the preeminent study by Mark Huber and Reto Knutti (2011), it is estimated that at least three-quarters of the climate change experienced over the past 60 years is due to human activity. Paradoxically, the actions that need to be taken to stop climate change run into a whole series of obstacles, including the problem of the ‘free-rider’ (“Why should I change my consumer habits if everyone else is changing theirs and I can reap the benefits just the same?”) and the short-sightedness of agents (households, firms and regulators) that sees them taking quite inappropriate decisions given that their longterm impact on the climate is clearly detrimental.