This workflow aims to provide actionable guidance on how European Union member states can design behavioural taxes and reform tax expenditures to better align tax incentives with climate, environmental and health objectives.
It provides an evidence-based review of the design of behavioural taxes, synthesising lessons from research and policy practice on how tax instruments can steer behaviour towards climate, environmental and health goals. It also examines how policy coherence can be strengthened through the reform of harmful subsidies and inconsistent tax expenditures, in line with the objectives of the Clean Industrial Deal.
The core of the analysis consists of a structured review of EU and international studies to identify best practices and common pitfalls in the design of behavioural taxes. Particular attention is given to their effectiveness, as well as to their revenue and distributional impacts.
To complement the review, and subject to data availability, the work will include an empirical exercise to contextualise and illustrate the key findings.