Welcome!

This webpage convenes the text of a proposed framework and commentaries for a Multilateral Carbon Tax Treaty (MCTT) model. The project’s lead researcher is Tatiana Falcão, an expert consultant working under a grant provided by the International Centre for Tax and Development (ICTD).

The objective of this project is to propose a model that countries can draw inspiration from when introducing their own domestic taxes, and perhaps obtain bilateral, regional and on a long term, global consensus on the employment of carbon taxes domestically utilizing a credit system on cross border transactions.

Global international tax policy approaches are often the product of a combination of different unilateral approaches. It is not uncommon for countries to introduce domestic legislation bearing in mind the concerns and economic needs of the domestic market, without looking at the global picture, and investigating whether it will lead to double taxation, will negatively impact third countries, or will impede free trade. The purpose is hence to shift the focus from domestic unilateral solutions to a global multilateral consensus, and to provide low- and middle-income countries an opportunity to take part in those debates.

The objective in suggesting a multilateral carbon tax treaty model is to strive to obtain consensus between policy makers, academics, intergovernmental officials and civil societies at this initial stage where carbon taxation is still incipient; is not widespread across the world, and still does not carry a mainstream approach. The aim is to achieve a single text that is the product of an ample consultation process with experts in the fields of environmental law, environmental economics, tax law and public policy, with a view of obtaining the text of a treaty that would reflect, from a technical perspective, the most optimal instrument to tax carbon on a multilateral basis. This is an exercise that should be stripped of any political consideration. The objective is to obtain the best treaty possible, from an environmental efficiency perspective by using a tax instrument.

The object of the treaty is hence very narrow: to create a binding obligation for countries to apply a carbon tax, as upstream in the consumption chain as possible.  

The webpage you are accessing now contains the product of this ample consultation process. It is a living document, as changes to the draft are updated as new comments come in and the debate progresses. If you are an expert in this field and would like to provide inputs to this document, do not hesitate to contact me at: mctt.ictd@gmail.com