“GREEN” POLICY AND ENVIRONMENTAL TAXATION AS THE INSTRUMENTS TO TACKLE CLIMATE CHANGE

The article is dedicated to environmental taxation as one of the possible policy instruments that along with other governmental and partnership measures could tackle climate change and assure green growth for the world and Ukraine in particular. European countries mostly focus on the taxation of energy sources, which allows them to be highly efficient in the field of GHG taxation. The Ukrainian model insists on controlling the level of environmental pollution for many years, it has low efficiency and control potential, high transaction, and administration costs. Price instruments for limiting greenhouse gas emissions are one of the most effective and rational solutions during the exacerbation of the climate change issue. These include taxes (on CO2 emissions that are directly related to emissions or the carbon content of fuel and excise duties on energy carriers) along with emissions trading systems. With the establishment of excise duty on energy and carbon taxes, states form a price for each ton of CO2 emissions, which contributes to dynamic efficiency, by stimulating technological changes to the development of innovative emission reduction technologies and static efficiency, i. e., reduction of CO2 emissions in the most financially affordable way. Excise duty on energy resources and taxes on CO2 emissions have the similar object of taxation, although the rates of excise taxes in the vast majority do not depend on the carbon content of the fuel. They are differentiated in the direction of promoting the competitiveness of more ecological types of fuel (reducing the rate for fuel with a lower sulfur content), protecting producers of energy-efficient enterprises, and preventing energy poverty. The excise duty rate consists of Pigou and Ramsay components, the proportions of which are chosen by fiscal necessity and occupy a large share of budget revenues. They are harmonized between EU countries with a unified approach. In common practice, funds accumulated from carbon tax should cover the damages caused to society and the costs of protecting and restoring an environment. Therefore, the article identifies the key groups of environmental taxes in the EU countries, analyses the European experience of the economic impact on environment preservation, examines possible ways of environmental taxation reform in Ukraine, based on the best foreign experience, and analyses the CO2 emissions among countries and continents by sectors and type of fuel. In addition, the author developed the draft concept of Ukraine's transition to a climate-neutral economy, highlighting the models of side-x-side functioning of the tradable permits system and taxes on CO2 emissions.