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Financial Ties : Green Taxes

The Financial Times advises :-

“Environmentalists have had a disappointing year. The Copenhagen talks fizzled and the economic crisis has overshadowed all other considerations. But the need for countries to repair towering fiscal deficits is an opening for the movement. As treasuries look for ways to raise more revenues, climate change activists should make the case for green taxes.”

So, environmental campaigners should be campaigning for green taxes to plug holes in public deficits caused by crashing banks ?

I think not.

Tax revenue that is collected on the basis of environmental pollution should always be hypothecated, committed to remediation and removal of environmental pollution.

The majority of the populations of the deficit-stricken economies (OK, then, the whole world) are quite right in resisting being locked down into extra taxation at present. Green taxes would be a financial tie too tight for most of the world’s economically stressed.

Green taxes spent on things other than green energy and energy efficiency would be a mockery.

Besides which, only very high levels of green taxation would have any impact on pollution behaviour – the “signal” from green taxes would be lost amongst general economic “instability” (that is, price rises due to other factors).

No. We don’t need to ask for green taxes, Carbon Trading, Cap and Dividend or expensive failed technology funds (I’m thinking Nuclear Power and Carbon Capture and Storage, here).

What we do need is an end to global Fossil Fuel subsidies, to put green energy on a level playing field with Carbon Energy, in the mid- to long-term scenario, which just might convince the world’s top investors and their advisers to create a burgeoning Green Energy economy.

“Green Fiscal Commission final report : Green Fiscal Reform (GFR) – a green tax shift : The concept of a green tax shift is simple: taxes on the things that are valued by society; like jobs, incomes and profits; are reduced and the lost revenue is replaced by taxes on things society does not like, such as pollution and environmental degradation. ‘Pay as you burn, not pay as you earn’ as one political formulation has put it. This shift not only reduces pollution, but is a more economically efficient way of raising necessary tax revenues. Taxes on labour at their current level, for example, distort the economy and reduce its efficiency and output. The same considerations suggest that, at times when taxes need to be increased to stabilize the public finances, green taxes should play a more than proportionate role in the increase. : The polluter pays : While a green tax shift does not mean the overall rate of tax will change at the national level, it does mean people and business will see the amount of tax they pay change: the polluter pays. Highly polluting households and businesses will see their tax bill increase where low pollution households and businesses will see their tax bill cut below what it would otherwise be…”

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