You remember the environmentalist’s mantra from well over a decade ago – governments should be taxing public “bads” like pollution and resource wastage and not over-relying on raising revenues from public “goods” like jobs and income. This was part of our strategy to get the environmental agenda onto the desks of Prime Ministers and Ministers of Finance and not to stay stuck in the environmental ministries.
The latest OECD Green Growth Newsletter from December 2012 contains a report of the first Green Growth and Sustainable Development (GG-SD) Forum held in Paris on 23 November last year. Scheduled to become an annual event, the Forum was a revelation for the way some governments have been taking this message to heart. Adding natural resource management into macro-economic planning is becoming routine for finance ministries in several countries around the world. Indonesia, Ethiopia and Mexico were stand-out examples at the Forum but there were others too.
That’s the good news. More depressing was the speaker from the European Commission who revealed that share of environmental taxes as a proportion of overall tax revenues across the EU-27 has been falling steadily. It now stands at a level of 6.2%, below the level of 7.0% 15 years ago. In other words, Europe appears to be going backwards as far as environmental taxation is concerned.
Of course, there are other complicated reasons for this trend, including various market-based instruments coming to the fore, like emissions trading. Nevertheless, with public revenues squeezed pretty well all over Europe, surely it is time to revisit the arguments for higher environmental taxes. We could do worse than look at the example of Denmark which was presented at the OECD Forum and is leading the way in imaginative environmental taxation.
Best wishes for the New Year!
Director, WWF European Policy Office