International Forum on Carbon Pricing

Carbon pricing mechanisms are effective fiscal tools that can significantly contribute to creating a green economy and preventing environmental pollution. Given the role of tax mechanisms in stimulating the green economy, the use of these mechanisms to support investments in renewable energy and reduce carbon emissions is of high importance worldwide. During the two days of the Forum, attendees reflected on various carbon pricing approaches, such as carbon taxes, emissions trading systems, and hybrid models. Opportunities to integrate carbon pricing with other climate policies and initiatives, along with identifying priorities for future carbon pricing analysis, policy development, and international cooperation have also been discussed.

The event featured six distinct sessions and saw prominent speakers and forward-thinkers from international organisations such as the Asian Development Bank (ADB), Inter-American Center of Tax Administrations (CIAT), International Monetary Fund (IMF), Directorate-General for Taxation and Customs Union, European Commission (DG-TAXUD), Organisation for Economic Co-operation and Development (OECD), United Nations Framework Convention on Climate Change (UNFCCC UN), The World Bank, as well as senior officials from IOTA member tax administrations including Azerbaijan, France, Portugal, and Switzerland. Additionally, business representatives from Boston Consulting Group (BCG), EY, Morgan Lewis, PwC, and members of academia from ADA University and Harvard University also had the opportunity to take the floor and share their views on the existing and emerging carbon pricing mechanisms as a tool to mitigate the negative effects of emissions.

It was a pleasure to have Mikayil Jabbarov, the Minister of Economy of the Republic of Azerbaijan, join us at the event. He opened the Forum alongside Orkhan Nazarli, Head of the State Tax Service (IOTA President), and Margaret Cotton from the International Monetary Fund, setting the stage for engaging discussions on various carbon pricing approaches.

The first session of the Forum focused on existing and emerging carbon pricing, providing an overview of carbon tax with global examples and how to design them to be a significant, stable and predictable source of revenues. Susanne Åkerfeldt from the World Bank moderated the session, and she was joined by representatives of international organizations such as Dirk Heine from the World Bank, José Alberto García Huitrón from the International Monetary Fund, Sandeep Bhattacharya from the Asian Development Bank, Anasuya Raj from the Tax and the Environment Unit of OECD, and Kasia Klaczynska Lewis from EY.

This was followed by a panel discussion on carbon tax implementations, featuring experts from the IOTA member tax administrations, including Alowin Moes & Dr Martina Zahno from Switzerland and Rui Manuel Miranda Collaço from Portugal. This session was facilitated by Kasia Klaczynska Lewis from EY, with Margaret Cotton from IMF and Daniel Besley from the World Bank joining the discussion as presenters.

The first day’s programme included hands-on discussions and plenty of learning with networking activities on carbon pricing issues. The third session delved into the topic of ‘Economic Impacts of Carbon Tax’, exploring the analysis of economic impacts on different sectors. This session was facilitated by World Bank’s Climate Change Economist William Hynes and featured presentations by Huseyn Huseynov from the Ministry of Economy of the Republic of Azerbaijan, José Alberto García Huitrón from IMF, Dirk Heine from the World Bank, Rosalind Piggot from PwC, Lizzy Coad from Boston Consulting Group, and Gregor Sahler from GIZ.

The last session of the first day focused on the topic of ‘Carbon Tax Utilization and Innovation’, with 4SİM Executive Director Fariz Jafarov moderating and being joined by Farid Isayev, Adviser to the Head of the State Tax Service under the Ministry of Economy of the Republic of Azerbaijan, Murad Sadikhov, Head of MASDAR Azerbaijan, and Teymur Guliyev Deputy Vice President of SOCAR, along with Juan Pablo Jimenez from CIAT, to discuss strategies for using carbon taxes and how they can drive technological innovation.

The closing day of the International Forum on Carbon Pricing highlighted engaging discussions and insights from distinguished speakers representing international organisations, the public sector, the business community, and academia actively involved in the work related to the development of carbon pricing mechanisms to decrease the negative effects of emissions. The plenary sessions aimed to provide in-depth insights into the social impacts of carbon taxes and an overview of the Carbon Border Adjustment Mechanism (CBAM).

Dr Fariz Ismailzade, Vice-Rector for Government, External, and Student Affairs at ADA University, facilitated the fifth session of the event, which explored the stakeholder perspectives and public engagement regarding the social impacts of carbon taxes. The session included influential speakers from different sectors such as Aygun Aliyeva from the State Support Agency for Non-Governmental Organizations of the Republic of Azerbaijan, Daniel Besley from the World Bank, Niclas Svenningsen from the United Nations Framework Convention on Climate Change, Christos Kotsogiannis from the Tax Administration Research Centre, and Mizan Khan from the LDCs Universities Consortium on Climate Change (LUCCC) Bangladesh.

The final session of the day was an enlightening discussion on the Carbon Border Adjustment Mechanism (CBAM), led by economist Anasuya Raj from the OECD’s Centre for Tax Policy and Administration. The session featured valuable perspectives from various experts, including Xavier Van den Bosch from the European Commission DG-TAXUD, Ely Sandler from Harvard University, Susanne Åkerfeldt from the World Bank, Victor Kovalenko from EY, Christina Renner from Morgan Lewis, and Vincent Mazeau from the General Directorate of Public Finances of France. Their insights shed light on the main purposes and objectives, the Regulatory Framework, and the Economic and Environmental Impact of CBAM.

 The event concluded with closing remarks from Samira Musayeva, Deputy Head of the State Tax Service under the Ministry of Economy of the Republic of Azerbaijan.

 This event has also established a strong base for further discussing its main findings and conclusions at the upcoming COP29 United Nations Climate Change Conference (UNFCCC), scheduled to take place from November 11th to 22nd, 2024, in Baku, Azerbaijan.

All materials, presentations, and photos from the International Forum on Carbon Pricing are now available on the dedicated event webpage of the new IOTA Web Portal. Video recordings of the event will be uploaded soon to the same webpage. This event was led by the IOTA Work Programme Manager Eugenijus Soldatkovas, with support from his colleague, IOTA International Taxation Expert Massimo Morarelli, under the supervision of the IOTA Executive Secretary Alix Perrignon de Troyes.

We would like to extend our heartfelt appreciation to our hosts, the State Tax Service under the Ministry of Economy of the Republic of Azerbaijan for their excellent hospitality and collaboration on this event.