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“The results confirm that many countries — advanced, emerging, and developing — are only at base camp with regard to getting energy prices right,” IMF managing director Christine Lagarde says in a foreword to the 199-page book.

For Canada, getting the price right could be a shock to the system of consumers and industry.

For instance, the IMF says gasoline should be taxed at about $US0.55 a litre instead of the current 36 cents, and road diesel at about US$0.64 per litre, instead of the current 42 cents.

The book uses U.S. currency calculations so exact numbers in Canadian dollars are not precise, but they roughly translate to a 52% increase in the taxes applied to both gasoline and diesel.

Meanwhile, the IMF says there should be a US$4.90 (about C$5.34) per gigajoule tax on coal, where there is none now, and natural gas should be taxed at $2.20 (C$2.39) per gigajoule, in place of the small subsidy that currently exists. A gigajoule is a unit of energy.

In an interview, co-author Ian Parry agreed such proposals have caused a voter backlash whenever suggested, but adds that the trick is to make clear to voters that other taxes, particularly those on income, will be cut by identical amounts.

We are talking about a smarter more efficient way to use taxation to meet a country’s fiscal objectives

“We are not talking about increasing the overall tax burden; we are talking about a smarter more efficient way to use taxation to meet a country’s fiscal objectives,” he said.

Parry admitted, however, that governments haven’t been very successful at communicating the “revenue neutral” message and that voters have been skeptical. One way of trying to convince people they are not being gouged is for governments to cut income taxes before introducing the added carbon charges.