Climate Change Mitigation Through Fiscal Innovation and New Fiscal Approaches in the European Dimension

The EU is facing increasing pressure to reform its fiscal framework to secure sustainable financing and ensure those climate commitments. This paper analyses the nature and impact of an EU climate tax in the context of globalisation, focusing on the interaction of the proposed EU-level climate tax with existing instruments such as the EU ETS and CBAM. The paper also addresses the question of whether it is possible to align the EU Climate Tax 2.0, how this could be done and proposes four concrete pillars for its design. Additionally, the paper reviews current significant climate-related instruments of both tax and quasi-tax character, adopted by selected member states or at the EU level. Finally, it discusses whether new fiscal instruments can bring sustainability and resilience and strengthen the EU’s position as a global leader in green finance. Through this comprehensive analysis, the paper aims to analyse new approaches to environmental taxes so that they can play a truly effective and innovative role in climate protection and provide a pathway for the EU to adopt innovative real Climate Tax 2.0, based on the complex set of relevant factors.