On 25 March 2026 the UN Committee of Experts on International Cooperation in Tax Matters discussed the workstreams for environmental taxation. The subcommittee on environmental tax presented its planned workstreams for comment and approval. The subcommittee is mandated to develop further practical guidance, focusing on carbon taxes and other environmental taxes. This would build on guidance issued in 2025 and the 2021 UN Carbon Tax Handbook.
The first workstream would examine the transition from fuel excise taxes to carbon-based taxes. The work would include looking at hard-to-abate sectors such as heavy transport and mining equipment. Also covered will be border carbon adjustment mechanisms and the interaction with partner jurisdictions.
The second workstream would look at taxation of emissions in the aviation industry. This has high climate change costs compared to other forms of transport. Despite this, the industry has generally been given favourable tax treatment. A paper would be prepared on the available instruments for taxing emissions.
The third workstream will develop papers on environmental tax on land use and forestry, and on critical mineral/rare earth extraction. Land and forests are carbon sinks, but there are environmental costs from unsustainable land use practices. Workstream 4 would be concerned with the equity-sensitive design of environmental taxes to achieve fair distribution outcomes. This could involve recycling of revenue to further the goal of social protection. Workstream 5 would aim to complete an analytical paper on the international law obligations in connection with environmental issues.
The sixth workstream will examine the taxation of energy intensive digital infrastructure. A practical guidance paper will be produced, assessing if tax on data centre operations is suitable and feasible.
Comments from the floor pointed to the environmental damage due to the fashion industry, the waste resulting from the food industry, and pollution from the aviation industry. However, textiles are often the first step in industrialisation for developing countries, and tax on firms in this industry may be counter-productive, as it could hold back development. Textiles are also an enabler of employment for women. Incentives could be given for a recycling economy, cutting down waste and sparing the environment by recycling the waste produced. For example, there could be incentives for converting urban waste into energy.
The aviation industry is a large polluter; but has generally been given favourable tax treatment. There may be an opportunity to increase tax revenue and reduce pollution by increasing environmental taxes on the aviation industry. Representatives of the aviation industry pointed out the importance of the industry for tourism, which is a key industry for many developing countries.
A contribution from academia noted that economic impact analyses for industries such as aviation, tourism or fashion could be helpful to the work of the subcommittees on the environment and the extractive industries.
