Green taxation and other economic instruments: Internalising environmental costs to make the polluter pay (original) (raw)

This study provides calculations of the external costs associated with air pollution and greenhouse gas emissions, water pollution, waste treatment, water scarcity and biodiversity loss in the EU, and of the extent to which these costs are internalised in taxation and other economic instruments in the EU. The results indicate that to a very large extent, EU polluters are not currently being made to pay. A range of potential environmental taxes and other economic instruments are assessed, and results presented of new macroeconomic modelling that indicates wider use of such measures, with revenues used to lower labour taxation, can produce positive impacts for EU GDP, employment and real household incomes.