Taxes Help Achieve Environmental Goals
By Harald Agerley
taxes seem to be effective in achieving environmental goals
and should be used more often.
increase in the use of environmental taxes can already be
recognized over the last decade. However, there are political
barriers to their implementation but these can be overcome
by careful design and extensive consultation. These are some
of the findings of a report on environmental taxes published
by the European Environment Agency (EEA)
are based on evaluation studies of 16 environmental taxes
that have been identified and reviewed by the EEA. These taxes
have been environmentally effective (achieving their environmental
objectives) and they seem to have achieved such objectives
at reasonable cost. Examples of particularly successful green
taxes include those on sulphur dioxide and nitrogen oxides
in Sweden, on toxic waste in Baden-Wurttemberg-Germany, on
water pollution in The Netherlands, and on the tax differentials
on leaded fuel and 'cleaner' diesel fuel in Sweden.
the EU's Fifth Environmental Action Program (1992), “Towards
Sustainability,” recommended the greater use of economic
and fiscal measures for environmental purposes, there has
been little progress since 1992 in the use of environmental
taxes at the EU level. At the national level, however, there
has been a continuing increase in the use of environmental
taxes over the last decade, with a particular acceleration
over the last 5-6 years. This is mainly apparent in Scandinavia,
but it is also noticeable in Austria, Belgium, France, Germany,
The Netherlands and the United Kingdom. Still, the overall
use of environmental taxes as a percentage of total taxes
is small (1.5 percent in 1993) and only slowly increasing.
This figure does not, however, take into account energy-related
taxes which had a share of 5.2 percent of total taxes in 1993
with a gradually increasing tendency.
are the main conclusions of a report on environmental taxes
(“Environmental Taxes: Implementation and Environmental
Effectiveness,” EEA Environmental Issues Series no.1,
Copenhagen 1996) as published today by the EEA. The report
was requested by the Committee on Environment, Health and
Consumer Protection of the European Parliament (EP).
was presented on the 3rd October 1996 at an international
conference of representatives of parliamentary environment
committees from EU Member States, as well as members of the
EP/Committee. The conference was organized by the Environment
and Regional Planning Committee of the Danish Parliament (Folketing).
The EEA report provides an overview of the main issues involved
in environmental taxes, with a particular focus on their environmental
effectiveness and on the political barriers to their implementation
and options of reducing them. It also emphasizes the value
of non-energy taxes.
to their environmental effectiveness, green taxes could deliver
improvements in three key areas of public policy: innovation
and competitiveness, employment, and the tax system.
taxes can thus deliver a multiple dividend. Moreover, as environmental
concerns move from point-source emissions and problems, such
as industrial emissions from pipelines and chimneys, to include
more diffuse and mobile sources of pollution, such as solid
waste, or from the agricultural and transport sectors, there
is increased scope for the greater use of green taxes, as
well as other market-based instruments, in order to achieve
environmental targets, both at the EU and the national level.
The use of environmental taxes can be expanded in three main
ways: 1) their extension to more European countries; 2) increasing
their harmonization and compatibility at the EU level; 3)
developing new areas for green taxes, e.g., on aviation, shipping
and road tranport, tourism, land use, water resources, minerals
and hazardous chemicals.
are, however, several important political barriers to the
introduction of environmental taxes, particularly energy taxes: