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Potential for Environmental Fiscal
Reform in 12 Member States – Key
Issues
Global Conference on Environmental
Taxation, Copenhagen
Dr Dominic Hogg
Chairman
Eunomia Research & Consulting Ltd
25th September 2014
Overview
1. Background to Study
2. Brief Results
3. Issues Arising from the Study
Background
1. Fiscal Crisis in Many Countries
2. European Semester Process
3. Options for Fiscal Reform
4. Country Specific Recommendations
from 2013
Background
1. 12 MS-cases: AT, BE, HR, CZ, EE, FR,
HU, LT, PL, RO, SK, (IT = update)
2. Builds on EEA work (ES, IE, IT, PT)
3. With Aarhus University and peer
reviewers in each Member State
4. Funded by DG Environment
5. Follow-up Study Now in Progress
1. 14 Member States
2. Eunomia, Aarhus University, IEEP
and peer reviewers
Background
Trends
EU-15/EU-27 1995 2000 2008 2012
Energy taxes 5.33 5.10 4.38 4.55
Transport taxes 1.36 1.33 1.31 1.21
Pollution/resource taxes 0.18 0.20 0.21 0.25
Environmental taxes 6.87 6.63 5.89 6.05
Background
Trends, Share of Total Revenue and Share of GDP
Background
0,00
2,00
4,00
6,00
8,00
10,00
12,00
Share of environmental taxes in total taxes in 2012 (as total taxes and
SSCs)
Background
Contributions to total environmental taxes in 2012
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Pollution
Transport
Energy
Brief Results
1. 12 Member States
2. Based on Potential Revenue Generation
3. Proposed ETD from Commission (2011)
4. Proposal on Passenger Car related taxes
(2005)
5. Otherwise, ‘best practice’ (revenue-wise)
1. Rate sometimes adjusted in line with PPP
Brief Results
Additional Revenues, Summary by Type, 2025 (12 MS)
0,00%
0,10%
0,20%
0,30%
0,40%
0,50%
0,60%
0,70%
0,80%
0,90%
1,00%
€0,00
€10,00
€20,00
€30,00
€40,00
€50,00
€60,00
€70,00
€80,00
Total Energy
Taxes
Total Transport
(excl. transport
fuels) Taxes
Total Pollution
and Resource
Taxes
Total Energy
Taxes
Total Transport
(excl. transport
fuels) Taxes
Total Pollution
and Resource
Taxes
Reve
ne
s G
en
era
ted
(%
GD
P)
Reve
nu
es G
en
era
ted
(b
illio
n E
uro
s)
€, billion % GDP
Brief Results
Additional Revenues, By Member State, 2025 (and 2011 levels)
0,00%
0,50%
1,00%
1,50%
2,00%
2,50%
3,00%
3,50%
4,00%
4,50%
Reve
nu
es a
s %
GD
P
Total Env. Taxes in 2011 Total Additional from Env. Taxes in 2025
Brief Results
Tax Revenues Compared with EHSs
€0,00
€10,00
€20,00
€30,00
€40,00
€50,00
€60,00
€70,00
Reve
nu
es G
en
era
ted
(€
billio
ns)
Env. Taxes EHSs
Issues
When is a tax a charge (and vice versa)? Especially an issue with water abstraction
and discharge Environmental elements, but basically a means
to recover cost
Also an issue with waste (though usually easier to deal with)
How should vehicles be taxed? Registration v circulation?
Environmental bases CO2 or air pollutants? Or neither?
How close to zero? (low emissions vehicles)
Effectiveness of vehicle taxation?
Issues
Why are air pollution taxes so low? Relatively well understood damages
Most taxes well below externalities
Many countries without any tax
Urban air quality is often poor
Links to transport (see above)
Resource taxes Still mainly the non-traded ones
What prospect for the circular economy?
Issues (UK Landfill Tax)
£0.00
£10.00
£20.00
£30.00
£40.00
£50.00
£60.00
£70.00
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000Leve
l of Stan
dard
Rate
Tax (£ p
er to
nn
e)
Ton
ne
s o
f W
aste
Lan
dfi
lled
at
Stan
dar
d R
ate
of
Tax
Total Landfilled at Standard Rate Non-LAC Waste Landfilled at Active Rate Tax Rate (right hand axis)
Issues
What scope for major tax shifts? EU tax and SSCs – 40% GDP
EU env tax take – 2.3% GDP
Upper end tax take – 4% GDP
Range in EU – 4-10% of total taxes and SSCs
Issues
