Energy Mix and Energy Taxation: A Comparison between the EU, Italy and Turkey

Abstract

Recent years have seen increasing worldwide attention being paid to the broad issue of energy and, in particular, to the aspect of energy security. The issue is even more crucial in Europe and Turkey, which are both energy dependent and are trying to diversify their strategies in order to secure energy availability and to moderate energy price increases. This paper aims to highlight similarities and differences between the European and Turkish energy frameworks and related energy policies, with a special focus on energy taxation. Among the EU countries, particular attention is paid to Italy, whose degree of energy dependency and use of energy taxation are among the highest in Europe. We argue that the use of market-based instruments such as energy taxes is an effective tool for policymakers to influence consumers’ energy consumption and change the energy mix towards less polluting and domestically produced fuels

Keywords

• Market-based instruments, energy taxation, decoupling, energy uses, energy demand elasticities.

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