Towards a green tax reform model (original) (raw)

Issues and Objectives of Green Tax Reform Ovidius University Annals, Economic Sciences Series

In this paper we try to argue why the environmental tax reform should be welcome, especially in our times of economic and financial instability. Therefore, we first state some principles of welfare economics concerning the environment and also remind the debate and outcomes on the double dividend paradigm. Then we briefly review and analyse the main instruments of environmental fiscal policy and their potential impact on public finances. We are now able to figure and analyse the main objectives, outlooks and issues of implementing a green tax reform in the European Union. In the end are some conclusions and recommendations for an effective environmental taxation in Romania.

Perspective of Environmental Tax Reform in Europe

Mekhanizm Rehuluvannya Economiky, 2012

Many economists have considered eco-taxation as a possible solution to many environmental problems. Sweden's Carbon Tax is the first example of such taxation scheme in actual use. The Ukraine introduced an Environmental Tax Reform in 2011. This paper presents an analysis of tendencies in the environmental policy and taxation in the European countries. Particular attention is paid to Sweden - the first and Ukraine - the last of the countries, which introduced the Environmental Taxes. Keywords: Environmental Tax, Carbon Tax, Environmental Tax Reform. Introduction. The deficit of natural resources will certainly become one of the signs of the 21st century. At the beginning of 20th century scientists noticed the change of quality of environment in large industrial cities (15). Currently, Greenhouse Gas Emissions are the main reason of the global warming threat. The introduction of Environmental Taxes Reform can become a powerful instrument in solving many ecological problems. Theref...

Environmental Tax Reform in Europe: Opportunities for the future

There is growing use of environmental taxes in Europe and a new momentum behind the environmental tax reform (ETR) agenda. When carefully designed such instruments can support economic (e.g. government revenues, innovation, employment), social (e.g. health, income distribution) and environmental (e.g. efficient resource use, energy security) objectives. How these instruments are designed influences their effectiveness and overall impact, which to date has been relatively small, leading to marginal changes in the tax system and incentives in the economy as a whole. There remains scope for the wider application and more effective use of such instruments, however progress is often held back by various obstacles including concerns over competitiveness impacts, public resistance to new taxes and the political costs of action. In some cases, a country’s efforts on environmental taxation have been hindered or complicated by a lack of action in others. Against this backdrop, the Ministry of...

EVALUATION OF THE EXPERIENCE IN ENVIRONMENTAL TAX REFORMS IN THE EU COUNTRIES

The urbanizing world, where human labour has been replaced by the mechanized machinery, is becoming increasingly dependent on the resources provided by nature. The demand of humanity in natural resources continues to grow. Due to the limitedness of the goods provided by nature, a human must take a more responsible approach towards the available resources by using the resources that are renewed more often and by protecting nonrenewable resources. Sustainable development is the field that analyses these paradigms. Social, economic, and environmental dimensions combined and the emphasis on one of the fiscal instruments for the purposes of sustainability bring forward the concept of environmental taxes. Environmental taxes may be interpreted as a fiscal instrument that transfers the tax burden from the “goods” onto the “bads”. Income generated by these taxes is distributed for stimulation of the sustainable economy based on conservation of the nature and more environmentally friendly production. The taxes considered may not only allow reducing the pollution and stimulating sustainable development of the national economy, but also influence the changes of the national tax structure. This article analyses the concepts of sustainable development, environmental taxes, and environmental tax reform. The development of environmental taxes, energy, transport, resources, and pollution in the selected EU countries is analysed. The analysis has shown that environmental taxes are sometimes allocated between the countries irrespective of whether a country has already implemented the environmental tax reform or not. In any case, each country should put own effort into environmental issues and seek sustainability.

Mismatches in the Concept of Environmental Taxes

WU International Taxation Research Paper Series No. 2015-02, 2015

Environmental taxation has become as a key element of green economy and sustainable growth. The relevance of taxation in this field is based on the effectiveness of eco-taxes to control the environmental cost. Nevertheless, the use of environmental taxation is not free from criticisms due to the fact that a tax is addressed to fund public expenditures. In this paper, the author tackles the mismatches found in the concept of environmental taxes. With the purpose to turn into a Sustainable and Green European Economy, environmental taxes could promote the reduction of pollution or avoid the most dangerous activities for the environment.

Reevaluating the first and the second dividends of environmental tax reforms

Energy Policy, 2010

There is increasing global interest in market-based climate change policies following the last elections in the United States. In this context an Exxon Mobil chief executive came out in favour of a carbon tax. This paper is concerned with the welfare analysis of Environmental Tax Reforms (ETR), and takes up the claims for the need of an unambiguous and operative definition of the double dividend both for empirical purposes and political advisement. In this paper, we contest the usual definition of the second dividend and its assimilation to an ''efficiency dividend''. We propose alternative definitions by suggesting a different splitting of the total welfare variation between the first and the second dividend in order to isolate the efficiency effects of the ETR. The new definitions become clearly understandable and easy for economic and policy interpretation. Concepts like ''weak'' and ''strong'' double dividend turn out to be unnecessary. Finally, we analyze ETR for the US economy to illustrate the advantages of the proposed definitions for policy implementation.

From regressive pollution taxes to progressive environmental tax reforms

European Economic Review, 2014

European countries have increased their use of environmental tax instruments by designing new tax bases. But, many countries have to face the opposition of the public opinion, for fear of the distributive consequences of these environmental tax reforms. This paper sheds light on the distributive consequences of environmental tax policies when households are heterogeneous. The objective is to assess whether an environmental tax reform could be Pareto improving, when the revenue of the pollution tax is recycled by a change in the labor tax properties. We show that, whatever the degree of regressivity of the environmental tax alone, it is possible to design a recycling mechanism that renders the tax reform Pareto improving, by simultaneously decreasing the average rate of the wage tax and increasing its progressivity.

Gradual green tax reforms

Energy Economics, 2011

Green tax reforms have become an important tool not only in protecting the environment but also in bringing about a more efficient tax system. However, reforms often imply accepting sacrifices in the short-run and bring about the risk of potential political opposition. Within this framework, the debate on whether to implement green tax reforms in one-step or gradually becomes of great interest. In this paper we use a calibrated dynamic general equilibrium model to evaluate different reforms that consist in increasing energy taxes and adjusting capital taxation in a revenue-neutral framework. Our findings show that, although an environmental dividend is always granted, the efficiency dividend depends on the type of reform, its size and how gradually it is implemented. Thus, one-step reforms that produce an efficiency dividend would imply large efficiency costs in the short-run. In this case, the reform could only produce efficiency gains in the short-run if it is implemented gradually, although such gains would end up disappearing in the long-run.