PCT Welcomes New Environmental Tax Specialist

The PCT Secretariat recently welcomed a new team member – Mariza Montes de Oca León as an environmental tax specialist to help facilitate the technical collaboration among the PCT Partners on environmental taxation. 

Mariza is an environmental economist with a decade-old experience in environmental taxation, fiscal policy and climate change. Previously, she worked with the International Carbon Action Partnership (ICAP) in Berlin and the Mario Molina Center, Ministry of Finance and the National Institute of Ecology and Climate Change in Mexico. Mariza holds a Master of Public Policy from the Hertie School in Berlin and a B.A. in Economics from the Instituto Tecnológico Autónomo de México (ITAM). Her Ph.D. dissertation at the German Institute for Economic Research and Humboldt University deals with the fuel subsidy reforms with an econometric focus.  

In this short interview, Mariza talks about her new role with the PCT Secretariat and how she will support the PCT Partners in deepening their joint agenda on environmental taxation under the PCT’s Tax & SDGs Workstream:

PCT Secretariat: Can you tell us more about your background? What made you pursue research in environmental taxation?

Mariza: I am an environmental economist with expertise in fiscal policy and climate change. My decade-old experience in environmental taxation combines both policy and research work. Previously, I was responsible for carbon pricing outreach in Latin America for the International Carbon Action Partnership (ICAP). I also have extensive experience in the public sector. Back in Mexico, I worked with the core team, which designed Mexico’s carbon tax policy, at the Ministry of Finance and the affiliated think tank, Centro Mario Molina. Lately, my research focus has been the political economy and the effectiveness of environmental taxes (both explicit and implicit). 

Born and raised in one of the poorest states in Mexico, I felt constantly puzzled by the contrast between the substantial natural capital in my country and the persistent development challenges. Therefore, I felt interested in working on the nexus between environmental and other development challenges from early on. Later, during my economic training, I was captivated by how this discipline provides tools to understand the interlinkages between development, the economy and the environment. Indeed, environmental taxation emerged as a research area in which development economics, macro-fiscal, environmental externalities, and political economy aspects are intensely connected. This is what made me want to pursue research in environmental taxation.

PCT Secretariat: What will you be working on at the PCT? How will you support the PCT Partners in enhancing their collaborative agenda on environmental taxation?

Mariza: I have recently joined the PCT to support the creation and technical substantiation of the environmental taxation workstream. In my new role, I will facilitate the technical collaboration among the PCT Partners in enhancing their joint agenda on environmental taxation through three areas: analytical work, capacity building, and outreach. Some of the planned outputs for the analytical work include several short papers, pilot studies, and scoping notes. For example, we will work on a short paper comparing the existing carbon pricing tools, suggesting possible ways of coordination for improved transparency and the possibility of more detailed and country-level metrics of carbon prices. In the capacity building area, we will, for instance, organize public events with relevant stakeholders to stimulate the discussion of the role of environmental taxation in Nationally Determined Contributions (NDCs). Finally, together with the Partners, we will develop outreach pieces, such as a joint blog by the Partners and a tax and environment resource page on the PCT website. 

PCT Secretariat: Why is it important for the PCT to deepen its technical collaboration on environmental taxation?

Mariza: It is important for the PCT to deepen its technical collaboration on environmental taxation due to four reasons: First, the synergies with the concepts and strategies are already available at the PCT. For example, the Medium-Term Revenue Strategy (MTRS), which provides a nationally owned multi-year and comprehensive plan for tax reform, can offer an excellent framework for the design of environmental taxes. Second, MTRS, with its whole-of-government approach, represents an optimal tool to go beyond explicit carbon pricing by considering tax expenditures that can undermine climate-related excise taxes. Third, as outlined in the PCT Progress Report 2021, PCT’s revised work program includes the ‘Tax and the SDGs’ workstream, which is an excellent opportunity to analyze Partners’ work on integrating environmental taxation into a fiscal strategy that can, in return, contribute to the SDGs. Finally, there is a need to understand the differences in the four PCT Partners' approaches to environmental taxation and find common ground in their work, more specifically, on carbon pricing at the technical level.

PCT Secretariat: In your opinion, what are the top three environmental taxation issues for developing countries and emerging economies within the context of the broader sustainable development agenda?

Mariza: Domestic resource mobilization is a top priority for developing countries and emerging economies to achieve their SDG targets. However, the COVID-19 pandemic has led to a deterioration of public finances across the globe. In addition, the pandemic has halted or even reversed the progress made in the sustainable development agenda in many regions. Against this background, in my opinion, I see the following as the top three environmental taxation issues for developing countries and emerging economies:

• The role of environmental taxation in reducing emissions and, as a green recovery measure, in delivering fiscal relief and contributing to the development goals.
• The critical importance of taking a socially just perspective when designing, evaluating and implementing environmental taxes while economic efficiency considerations, jobs and communities are at the core of the design.
• The need to increase our understanding of the political economy of carbon taxation and other environmental taxation types.

 PCT Secretariat: Thank you Mariza for this informative conversation. We are excited to work with you!