Economic instruments and the prospects for non-fossil fuel energy

Climate change is a new global threat whose reality has only recently been accepted by most major countries. One of the tools for reducing emissions is taxation. It is argued that a system of taxation based on a carbon tax would be the most effective way of addressing the problem. Whilst a number of EU states have experimented with some form of carbon tax, the difficulties which arise when it is imposed by an individual state are daunting. An effective carbon tax would have to be applied to a larger entity – the EU itself would be a good starting point.