Environment Taxation Should Be a Practical Issue, Not a Political One
McRae, Hamish, The Independent (London, England)
We have to have taxes, of course, but few people would argue that they were in themselves desirable. So if someone comes along and declares that he or she has hit on a wonderful form of tax that will increase employment, raise revenues, and help clean up the environment, the idea deserves both attention and a certain scepticism: if this is such a great idea, why has no-one done it before?
The idea is environmental taxation, and it is promoted in two papers just published: one by the left-of-centre think-tank, the Institute for Public Policy Research*; the other by the European Environment Agency** in Copenhagen. The IPPR paper is a political tract, calling for a series of measures increasing taxation on energy and on activities which do damage to the environment. There is an action plan to bring in a commercial and industrial energy tax, higher petrol and diesel duty, higher waste disposal taxation, a quarrying tax, office parking tax and an end of company car tax perks. The EEA paper, on the other hand, is a study of what European countries have done with environmental taxation and how well these measures have worked in practice. It provides a good starting point, a bench-mark, for the ideas set out by the IPPR.
The first point to be clear about is Britain tends to raise a rather higher proportion of taxation from environment and energy taxes than most European countries. As the graph shows, we raise more from environmental taxation than France, Germany or Italy and more from energy than France or Germany. Countries such as Sweden, which one might imagine are very environmentally concerned, do not raise very much revenue from these taxes, and while the environmentally-conscious Netherlands is top of the league on the environment side, it is second from the bottom on energy taxation. It is worth looking at the figures, because anyone delving into this area tends to get a rather different, and highly political, view of the world. Party political statements are trotted out as facts. The IPPR is sadly guilty of this. For example its press release asserts: "Countries with high energy prices, like Germany, Japan and Italy, have been more successful innovators than countries with lower energy prices." Leaving aside the fact that the US is surely the most innovative country in the world, this statement ignores the fact that Germany does not have particularly high energy prices, that Japan's new car fleet is less energy-efficient than it was 20 years ago, or that Italy's energy and environmental taxation is lower than the UK's. As a result, IPPR headlines such as "Tax shift could create half a million new jobs at no cost to the Treasury" do not carry much credibility. IPPR's pamphlet has a strong anti-government tone. Thus …
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Publication information: Article title: Environment Taxation Should Be a Practical Issue, Not a Political One. Contributors: McRae, Hamish - Author. Newspaper title: The Independent (London, England). Publication date: October 15, 1996. Page number: 24. © 2009 The Independent - London. Provided by ProQuest LLC. All Rights Reserved.