Cleaner Production Tools -- Environmental Taxes
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The goal of an environmental tax (or green tax) is to make pollution and depletion of natural resources more expensive, while providing incentives for environmental protection. An effective environmental tax policy shifts the tax burden from the general population to the polluter, and changes the behaviour of a society at the same time. It will be useful for both pollution control and the management of a natural source.
Environmental taxes (ET) can be quite simple (such as an impost fee at a landfill) or extremely complex (such as the taxation system for a resource-based industry like the pulp and paper industry.) A simple landfill fee can easily be seen to affect the way people use a landfill, but it is hard to control the effects of taxation on a complex industry. The desired effect is usually to get an industry to invest in implementing cleaner production or pollution prevention (although end-of-pipe pollution treatment may also be used.)
Some of the problems with environmental taxes include:
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It is difficult to set taxes at a level which reflect the real environmental cost of an activity or product.
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If there is no alternative to a resource (say a fuel) higher costs shift the burden to the consumer. This discourages consumption of the resource but may not lead to cleaner production.
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It is difficult to direct the revenue from an ET directly towards renewing the correct resource - frequently the revenue simply goes into a general fund. However, directing the revenue very specifically may limit government policy options.
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Environmental taxes can damage the competitive advantage of a national industry unless a tax benefit is directed to eco-efficient enterprises in the same industry.
Benefits of environmental taxes:
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Some kinds of environmental taxes (for example, emissions taxes) have been shown to produce measurable results.
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Proponents of green taxes argue that employment can be created, resource use optomised and pollution reduced by increasing taxes on resource use and decreasing income taxes.
In some industries, and especially in developing countries, a system of emissions charges and abatement subsidies has been found to be effective. For an interesting and detailed explanation of the Chinese system, please see these World Bank Working Papers:
Pollution Charge, Community Pressure and Abatement Cost:
An Analysis of
Chinese Industries -- http://www.worldbank.org/nipr/work_paper/hua/costcurvewp.pdf
-- January 2000
How the Chinese System of Charges and Subsidies Affects Pollution Control Efforts by China's Top Industrial Polluters -- http://www.worldbank.org/nipr/work_paper/wps2198.htm -- October 1999
Endogenous Enforcement and Effectiveness of China's Pollution Levy
System --http://www.worldbank.org/nipr/work_paper/hua/levywp2000.pdf
-- July 1999
Surviving Success: Policy Reform and the Future of Industrial Pollution in China -- http://www.worldbank.org/nipr/work_paper/survive/index.htm -- March 1997
Bending the Rules: Discretionary Pollution Control in China -- http://www.worldbank.org/nipr/work_paper/1761/index.htm -- February 1997
Pricing Industrial Pollution In China: An Econometric Analysis of the Levy
System -- http://www.worldbank.org/nipr/work_paper/1644/index.htm
-- September 1996
ŠNDRC 2000-2006