We gather the latest major reports on environmental fiscal reform below. Please note, Green Budget Europe is not responsible for the content of external reports.
The inclusion of road transport in emissions trading will not help the climate
A range of actors have proposed the inclusion of road transport in the EU Emissions Trading System (ETS). This analysis reviews the existing literature on the topic and concludes that the inclusion of road transport in the ETS would not be an effective instrument to achieve climate change objectives in the sector:
- The weak price signal in the medium term delays innovations and increases their cost.
- Incomplete information and unpredictability lead to poor investment decisions on the part of consumers.
- Economic efficiency in theory does not always lead to socially desired outcomes in practice.
- Upstream emissions would not be sufficiently covered by the scheme.
An effective climate change policy should rather be based on ambitiously developing EU-wide CO2 emission standards and adjustments to fuel taxes.
Green taxes in a post-Paris world: are millions of nays inevitable? (The Grantham Research Institute)
This paper addresses the question of the acceptability of cost-effective climate policy in a real-voting setting, using different case studies such as voting behavior in a large ballot on energy taxes in Switzerland. Researchers find that distributional and competitiveness concerns reduced the acceptability of energy taxes, along with the perception of ineffectiveness. The study shows that providing proper information on the functioning of environmental taxes can close both the gap between acceptability ex ante and ex post and the gap between economists’ prescriptions and the preferences of the general public.
Sustainability-oriented EU taxes: the example of a European carbon-based flight ticket tax (WiFO)
Taxing the aviation sector at the EU level and using the resulting revenues to reduce Member States’ contributions to finance the EU budget presents itself as a huge opportunity not only to decrease carbon emissions effectively, but also to reform the EU system of own resources. This paper calculates the tax revenues per passenger per route that could have been generated in 2014 by introducing a carbon-based flight ticket tax in the EU.
Environmental taxes in the EU – 2014 data for the EU Member States (Eurostat)
In the European Union (EU), environmental taxes amounted to €343.6bn in 2014, compared with €282.0bn in 2004. However, the share of environment taxes in total revenues from taxes and social contributions has decreased over this 10-year period, from 6.8% in 2004 to 6.3% in 2014.
Does the European diesel car boom mitigate global warming? (Prof Eckard Helmers)
The science is clear: from a climate perspective, diesel is worse – not better – than petrol. In this paper, presented at a morning briefing organised by Green Budget Europe in the European Parliament, Professor Helmers warns that diesel is intensifying rather than mitigating global warming. This is due to uncounted emissions, principally black carbon (soot) and from refining, pushing diesel’s real climate burden much higher than petrol.
Study on assessing the Environmental Fiscal Reform potential for the EU28 (Eunomia, IEEP & others)
This study, undertaken by Eunomia Research & Consulting (Eunomia) in conjunction with the Institute for European Environmental Policy (IEEP), Aarhus University, ENT and Denkstatt, provides argumentation and empirical data or secondary sources on the potential economic and social benefits of environmental fiscal reform, to support the input in the European Semester process on environmental protection and resource efficiency, for all EU Member States. The study finds that EU countries could generate €222 billion by 2035 by shifting to green taxes.
Taxation trends in the European Union – Data for the EU Member States, Iceland and Norway (Eurostat)
This report contains a detailed statistical and economic analysis of the tax systems of the Member States of the European Union, plus Iceland and Norway, which are Members of the European Economic Area. Environmental taxes in the EU, which according to another Eurostat report
amounted to 6.3% of total tax revenues in 2013, are also outlined.
Fiscal Considerations in the Design of Green Tax Reforms (GGKP)
Fiscal considerations in the design of green tax reforms are crucial to convince finance ministries of the potential benefits of environmental fiscal reform (EFR). This GGKP working paper, authored by Green Budget Europe’s Kai Schlegelmilch and Green Budget Germany’s Amani Joas, develops a conceptual framework that allows policymakers to estimate the revenue potential of an envisioned EFR instrument.
Carbon and inequality: from Kyoto to Paris. Trends in the global inequality of carbon emissions (1998-2013) & prospects for an equitable adaptation fund (Chancel & Pikkety)
This study presents evolutions in the global distribution of CO2e emissions (CO2 and other Green House Gases [GHG]) between world individuals from 1998 and 2013 and examines different strategies to contribute to a global climate adaptation fund based on efforts shared among high emitters rather than high-income countries. To this end, the authors combine data on historical trends in per capita country-level emissions, within-country income inequality, as well as environmental input-output data (capturing consumption-based CO2 emissions and other GHG gases) and a simple income-CO2e elasticity model. Our data covers approximately 90% of world GDP, population and CO2e emissions. The results depend not only on within country inequalities, but also on changes in consumption-based CO2e emission levels of countries
Companion to the Inventory of Support Measures for Fossil Fuels (OECD)
This publication is concerned with all policies that directly support the production or consumption of fossil fuels in OECD countries and in a selection of partner economies. It provides a useful complement to the online OECD database that identifies and estimates direct budgetary transfers and tax expenditures benefitting fossil fuels, and from which it derives summary results and indicators on support to fossil fuels, as well as policy recommendations.
Tax reforms in EU Member States 2015 – Tax policy challenges for economic growth and fiscal sustainability (European Commission)
This annual report, prepared by the European Commission’s Directorate General for Economic and Financial Affairs and the Directorate General for Taxation and Customs Union, aims to make a contribution to discussions on tax policy in the EU through an analysis of tax policy challenges and recent reforms in the EU Member States.
Environmental subsidies and similar transfer - Guidelines (Eurostat)
To solve environmental problems caused by current production and consumption patterns, profound changes are needed, some of which involving substantial economic costs and affecting labour and capital markets, as well as consumption behaviour. This guide provides a framework and practical recommendations for establishing environmental subsidies and similar transfers statistics. It offers harmonised terminology, concepts, classifications and rules as well as data sources and methods on the interpretation of indicators.
The distributional effects of energy taxes (OECD)
A major obstacle to the more widespread use of energy taxation is the concern that energy taxes may be regressive, hitting the poor harder than the rich. Evidence is surprisingly scarce with only a few studies investigating the distributional effects of energy taxes in OECD countries. This paper adds to this evidence by providing a systematic analysis of the distributional effects of the main energy taxes in 21 OECD countries.
How large are global energy subsidies? (IMF)
Fossil fuel subsidies are projected at $5.3 trillion in 2015, or 6.5 percent of global GDP, according to a May 2015IMF
study. Most of this arises from countries setting energy taxes below levels that fully reflect the environmental damage associated with energy consumption (global warming, air pollution, congestion and road damage).
Report | Country-level estimates