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This paper assesses whether the level of taxation of motor fuel is broadly appropriate in a group of countries (OECD, BRICs and South Africa) accounting for more than 80 percent of world greenhouse gas emissions. The analysis deals with emissions from oil combustion in transport, which account for about 40 percent of carbon dioxide emissions. In the benchmark specification, six countries (responsible, in turn, for more than 40 percent of worldwide motor-fuel greenhouse gas world emissions) would be undertaxing motor fuel. The authors evaluate the sensitivity of the results to the values of the elasticities and externalities that used in the analysis. They find that varying the values of these parameters (within the level of uncertainty reasonably associated with them) significantly affects the results. This implies that, while informative, the results must be taken as indicative. Further analysis for a particular country must rely on a well-informed choice for the values of the country-specific parameters.

Carbon dioxide --- Carbon dioxide emissions --- Climate change --- Climate Change Economics --- Climate Change Mitigation and Green House Gases --- Costs --- Elasticities --- Energy --- Energy Production and Transportation --- Environment --- Environmental taxes --- Excise tax --- Externalities --- Fuel taxation --- Gasoline --- Gasoline price --- Gasoline prices --- Gasoline taxation --- Greenhouse gas --- Greenhouse gas emissions --- Macroeconomics and Economic Growth --- Motor fuel --- Subsidies --- Tax --- Taxation & Subsidies --- Taxes --- Transport --- Transport Economics Policy & Planning