VERSITET

MIKAEL SKOU ANDERSEN

AARHUSUNIVERSITY 10. APRIL 2014

UNI

POTENTIAL FOR ENVIRONMENTAL FISCAL REFORM IN 12 EU MS

EUNOMIA & AU STUDY FOR DG ENV - RESULTS AND REFLECTIONS

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 2014

“Getting the prices right, means using fiscal policy to make sure, that the harm we do is reflected in the prices we pay”

Christine Lagarde, IMF (June 2012)

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 2014

ENVIRONMENTALLY-RELATED TAX REVENUES AS A SHARE OF TOTAL REVENUES FROM TAXES AND SOCIAL CONTRIBUTIONS

3

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 2014

› indirect taxes - incl. on energy - less damaging

4

RELATIVE BENEFITS (FISCAL CRISIS)

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 20145

ENVIRONMENTAL TAX REVENUES (% GDP)

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 2014

NOW + NEW BY 2025 (% GDP)

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

3,5%

4,0%

4,5%

Re

ven

ue

s a

s %

GD

P

Total Env. Taxes in 2011 Total Additional from Env. Taxes in 2025

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 2014

KEY RESULTS IN 12 MS

0

10

20

30

40

50

60

70

Austria Belgium CzechRepublic

Estonia France Croatia Hungary Italy Lithuania Poland Romania Slovakia

Re

ven

ue

s G

en

era

ted

(€

bill

ion

s)

Env. Taxes

EHSs

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 2014

SUMMARY – BY CATEGORY

0,00%

0,10%

0,20%

0,30%

0,40%

0,50%

0,60%

0,70%

0,80%

0,90%

1,00%

€0

€10

€20

€30

€40

€50

€60

€70

€80

Total EnergyTaxes

Total Transport(excl. transport

fuels) Taxes

Total Pollutionand Resource

Taxes

Total EnergyTaxes

Total Transport(excl. transport

fuels) Taxes

Total Pollutionand Resource

Taxes

Re

ven

es

Re

ven

es

Re

ven

es

Re

ven

es

Ge

ne

rate

d (

% G

DP

)G

en

era

ted

(%

GD

P)

Ge

ne

rate

d (

% G

DP

)G

en

era

ted

(%

GD

P)

Re

ven

ue

s G

en

era

ted

(b

illio

n E

uro

s)R

eve

nu

es

Ge

ne

rate

d (

billio

n E

uro

s)R

eve

nu

es

Ge

ne

rate

d (

billio

n E

uro

s)R

eve

nu

es

Ge

ne

rate

d (

billio

n E

uro

s)

€, billion % GDP

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 2014

ENERGY TAXES (2025) INCL. MOTOR FUELS

0,00%

0,05%

0,10%

0,15%

0,20%

0,25%

0,30%

0,35%

0,40%

0,45%

0,50%

0

5

10

15

20

25

30

35

40

EnergyExcise

Duties -Transport

fuels

EnergyExcise

Duties - C&I/ Heating

EnergyExcise

Duties -Electricity

TotalEnergyTaxes

EnergyExcise

Duties -Transport

fuels

EnergyExcise

Duties - C&I/ Heating

EnergyExcise

Duties -Electricity

TotalEnergyTaxes

Re

ven

es

Re

ven

es

Re

ven

es

Re

ven

es

Ge

ne

rate

d (

% G

DP

)G

en

era

ted

(%

GD

P)

Ge

ne

rate

d (

% G

DP

)G

en

era

ted

(%

GD

P)

Re

ven

ue

s G

en

era

ted

(b

illio

n E

uro

s)R

eve

nu

es

Ge

ne

rate

d (

billio

n E

uro

s)R

eve

nu

es

Ge

ne

rate

d (

billio

n E

uro

s)R

eve

nu

es

Ge

ne

rate

d (

billio

n E

uro

s)

€, billion % GDP

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 2014

TRANSPORT (2025) EXCL. MOTOR FUELS

0,00%

0,10%

0,20%

0,30%

0,40%

0,50%

0,60%

0,70%

0,80%

0,90%

1,00%

0

10

20

30

40

50

60

70

80

VehicleTaxes

PassengerAviation

Tax

FreightAviation

Tax

TotalTransport

(excl.transport

fuels)Taxes

VehicleTaxes

PassengerAviation

Tax

FreightAviation

Tax

TotalTransport

(excl.transport

fuels)Taxes

Re

ven

es

Re

ven

es

Re

ven

es

Re

ven

es

Ge

ne

rate

d (

% G

DP

)G

en

era

ted

(%

GD

P)

Ge

ne

rate

d (

% G

DP

)G

en

era

ted

(%

GD

P)

Re

ven

ue

s G

en

era

ted

(b

illio

n E

uro

s)R

eve

nu

es

Ge

ne

rate

d (

billio

n E

uro

s)R

eve

nu

es

Ge

ne

rate

d (

billio

n E

uro

s)R

eve

nu

es

Ge

ne

rate

d (

billio

n E

uro

s)

€, billion % GDP

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 2014

POLLUTION AND RESOURCE TAXES (2025)

0,00%

0,05%

0,10%

0,15%

0,20%

0,25%

0,30%

0,35%

€0

€5

€10

€15

€20

€25

€30

Re

ven

es

Ge

ne

rate

d (

% G

DP

)R

eve

ne

s G

en

era

ted

(%

GD

P)

Re

ven

es

Ge

ne

rate

d (

% G

DP

)R

eve

ne

s G

en

era

ted

(%

GD

P)

Re

ven

ue

s G

en

era

ted

(b

illio

n

Re

ven

ue

s G

en

era

ted

(b

illio

n

Re

ven

ue

s G

en

era

ted

(b

illio

n

Re

ven

ue

s G

en

era

ted

(b

illio

n E

uro

Eu

roE

uro

Eu

ro)

€, billion % GDP

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 2014

ENERGY INCL. MOTOR FUELS

12

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 2014

› Remove inconsistencies and equalise tax rates per GJ› Introduce CO2 element in tax base (at ETS price)

13

ENERGY TAXATION DIRECTIVE AMENDMENT

0

2

4

6

8

10

12

14

16

18

1

Figure 2: Existing minima expressed in euro per GJ

petrol diesel LPG E85

0

0,1

0,2

0,3

0,4

0,5

0,6

1

Figure 4: Current minima expressed in euro per GJ

gas oil natural gas coal

Motor fuels Heating fuels

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 201414

IMPLICIT TAXATION OF HEATING FUELS (NON-BUSINESS)

ETD-new

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 201415

IMPLICIT TAXATION OF HEATING FUELS (BUSINESS)

ETD-new

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 201416

REPORTED TAXATION OF MOTOR FUELS IN 12 MS

(JULY 2013)

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 201417

IMPLICIT TAXATION OF MOTOR FUELS(JULY 2013 WITH EXISTING ETD MINIMUM AND ETD PROPOSED 2018)

€9.6/GJ

CO2 at €20/t

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 201418

ELECTRICITY IN ETD-2018

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 2014

TRANSPORT EXCL. MOTOR FUELS

19

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 2014

› Passenger vehicles› Commission Proposal COM(2005)261 final: framework for

transition to annual circulation taxes (differentiated accordingto CO2 emissions) and gradual phasing out of registrationtaxes

› Commission Communication COM(2012)756 final: clarifyingpresent legal framework for registration and circulation taxes

› Heavy goods vehicles› Eurovignette Directive: framework for road pricing (incl.

external costs of congestion, air pollution and noise)

20

EUROPEAN FRAMEWORK FOR VEHICLE TAXATION

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 2014

€ per year Circulation tax Registrationtax/yr

Sum per vehicle

ATBEFRIT

154300

0186

395740

34

549374

-0220

CZHUPLSK

54670

108

086325

5415332

113

EELTHRRO

0000

00

3819

00

3819

21

REPORTED TAXATION OF PASSENGER VEHICLES

BASED ON EUROSTAT NATIONAL TAX LIST AND EEA DATA

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 2014

Tax take in % GDP

Transport taxation

Best quartileEU28

Potential

ATBEFRIT

2.111.731.422.22

2.672.672.672.67

0.560.941.250.45

CZHUPLSK

2.212.252.081.75

2.672.672.672.67

0.460.420.590.92

EELTRO

2.031.641.55

2.672.672.67

0.641.031.12

22

TAXATION OF VEHICLES IN % OF GDPEUROSTAT NATIONAL TAX LIST

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 2014

POLLUTION & RESOURCES

23

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 2014

› Eurovignette Directive› Art.: Definition of external costs for air pollution and noise

› Water Framework Directive (WFD)› Art. 9: Cost-recovery including environmental & resource

costs› Annex VI cf. Art 11(4): Economic and fiscal instruments› Relevance: water abstraction – waste water discharges –

fertilisers – pesticides - chemicals

› Packaging and Packaging Waste Directive › Art. 15: Use of economic instruments› Waste management consultation: landfill/incineration tax

24

EUROPEAN FRAMEWORK FOR POLLUTION & RESOURCE TAXATION

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 201425

TAX ON WATER ABSTRACTIONDOMESTIC

AARHUSUNIVERSITY

POTENTIAL FOR ENV. FISCAL REFORM MIKAEL SKOU ANDERSEN

10 APRIL 2014

› Main results› Feasible to identify revenues for budget consolidation and/or tax shifting› Need for improved data and analysis on vehicle taxation

› Items of further interest› Cost recovery for environmental services (water, waste, waste water etc)› Potential for HGV road pricing in view of road infrastructure arrangements› Chemicals/Land use/Biodiversity/Recreation

› Windows of opportunity› European Semester CSR› New revenue sources for RES› Energy security

26

IMPLICATIONS & REFLECTIONS