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7/27/2019 EEA Briefing Note for ETR Workshop_Madrid
1/16
EEA
EEAStaffPositionNote(September2012)
SPN12/01
ENVIRONMENTALFISCALREFORM
ILLUSTRATIVEPOTENTIALINSPAIN
PreparedforaseminaronEnvironmentalFiscalReform
Madrid,September13th
2012
hostedby
Ministerio
de
Agricultura,
Alimentacin
yMedio
Ambiente
By
StefanSpeckandMikaelSkouAndersen
European Environment Agency
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2
Environmentalfiscalreform:illustrativepotentialinSpain
Summary
Spainfacesafiscalchallengetheaddressingofwhichrequiresacombinationofcutsingovernment
expenditureandincreasesintaxation.Spainwithitscurrentleveloftaxation(includingsocial
securitycontributions),measuredasashareofGDP,isamongthelowestintheEU,i.e.itranks
accordingtoEurostat18th.Thetaxsystemreliesheavilyondirecttaxesandsocialsecurity
contributionsandincontrastrevenuefromindirecttaxesbeingthesecondlowestintheEU.
RecentlySpainadoptedambitiousreformprogrammesanditplanstoachieveageneralgovernment
deficitof5.3%ofGDPin2012.Followingthefiscalcrisisthegrossdebtincreasedfromanaverageof
39.8%ofGDP(20052008)to68.5%in2011anditisassumedthatitwillfurtherincreaseto87%by
2013(EC,
2012).
Toaddressthisfinancialchallenge,thegovernmentintroducedseveralbudgetarymeasuresatthe
revenueaswellastheexpendituresidein2011and2012.Thestabilityprogrammeforeseesan
increaseinindirecttaxesin2013.Therearemanyinterestingideasastohowthebudgetarygapcan
bebridged,butsofarnoanalysisastohowabroadeningofthetaxbasewithenvironmentaltaxes,
leviesandchargesmightcontribute.
Thefocusofthepaperistoprovideashortoverviewofthecurrentsituationoftheuseof
environmentallyrelatedtaxesinSpainaswellastohighlightthepotentialofenvironmentaltaxesin
termsof
their
revenue
raising
potential
based
on
established
practice
in
EU
Member
States.
Thepaperalsodebatetheillustrativepotentialforasubstantialenvironmentaltax/fiscalreform,
i.e.theshiftingofthetaxburdenfromlabourtowardsconsumptionandenvironmentaltaxesas
statedinthe2012countryspecificrecommendationforSpainbytheCounciloftheEuropean
Union1:Introduceataxationsystemconsistentwiththefiscalconsolidationeffortsandmore
supportiveofgrowth,includingashiftawayfromlabourtowardsconsumptionandenvironmental
taxation.
The
knowledge
base
for
Environmental
Fiscal
Reform
Climatechange,biodiversityloss,ecosystemdegradation,thehumanhealthimpactsofchemical
pollution,growingmaterialresourcescarcity,concernsaboutfood,energyandwatersecurity,as
wellasnationalbudgetdeficitsandanincreasinglyageingpopulationarecurrentchallengesfacing
theEuropeanUnion.Atthesametime,thereisincreasedunderstandingofthelinkagesbetween
manyenvironmental,economicandsocialproblems,pointingtothecosteffectivenessofintegrated
packagesofpolicymeasures(EEA,2010).
1
See: page 12 of the Council Recommendation on the National Reform Programme 2012 of Spain anddelivering a Council opinion on the Stability Programme for Spain, 2012-2015, Council of the European Union,
Brussels, 6 July 2012; http://register.consilium.europa.eu/pdf/en/12/st11/st11273.en12.pdf
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Apolicythatshiftspartofthetaxbasetoenvironmentallydamagingconsumptionactivitiescanbea
vitalpartofanoverallpolicypackagethataimstotacklethesemultiplechallenges,asrecommended
in the Europe 2020 strategy and in particular spelled out in the 2012 Countryspecific
RecommendationsforcountriesincludingAustria,Belgium,France,ItalyandSpain2.
Suchashiftinpolicymeasuresthatshiftrevenueraisinginstrumentsfromlabourandcapitalto
resourceuseandpollutiontaxesisoftendefinedasanEnvironmentalTaxorFiscalReform(ETR/
EFR).ExperiencesgainedinseveralEUmemberstates,suchasSweden,Denmark,Finland,
Netherlands,Germany,UK,EstoniaandtheCzechRepublic,whichhaveimplementedETRinthe
1990sandearly2000s,showbroadlypositiveresults.
TheimplementedEFRshavebeenregularlydesignedaccordingtotherevenueneutralityprinciple
(i.e.increasingrevenuesfromenvironmentaltaxesinordertoreducerevenuesfromlabourand
capitaltaxes),orpartiallyso,thusrelievingthepressureonlabourasataxbase.
Underthecurrentcircumstancesoffiscalconsolidationneeds,arenunciationoftherevenue
neutralityprincipleseemstobeanoptiontobeconsidered.Thisaspectisexplicitlyhighlightedina
recentreportpublishedbytheInternationalMonetaryFund(IMF):
Thesepricingpolicies[carbontaxesortheircapandtradeequivalentswithallowanceauctions]can
alsobecomealargenewsourceofgovernmentrevenue,whichcouldmakeasignificantcontribution
tomeetingfiscalconsolidationchallengesand,moregenerally,tobuildingmoreefficientandfairer
taxsystem... Revenuesfromthesefiscalinstrumentscancontributesignificantlytofiscal
consolidationneedsifcountriesdonotimplementsuchpolicies,theywillneedtorelymoreheavily
onother
deficit
reduction
measures
(IMF,
2012
p.v
and
p.ix).
Between1996and2005theEuropeanEnvironmentAgency(EEA)publishedfourreports(EEA,1996,
2000,2005and2006)onmarketbasedinstrumentsandthepotentialforenvironmentaltaxreform
intheEU.Morerecentlyithascommissionedresearchintotheimpactsofenvironmentaltaxreform
onthepoliticalfeasibilityofsubstantialETR,onecoinnovationandonthedistributionalimplications
(Bassietal.,2009,EEA,2011aand2011b).
OtherbodiessuchastheOECD(OECD,2001,2006and2010),plusawiderangeofEUandnational
researchactivities(forexample,AndersenandEkins,2009,UKGreenFiscalCommission,2010,and
EkinsandSpeck,2011)havefocusedsuccessfullyonansweringquestionsaroundthepurpose,
validityandeffectivenessofmanyEFRinstruments.
StudiesbyLopezGuzman(2004),Gagoetal.(2006),Labandeiraetal.(2007), Labandeira(2011),
GagoandLabandeiro(2012),Poncela,deMiguelandManzano(2011)andMarkandya etal.(2012)
haveassessedtheenvironmentaltaxationsysteminSpainandaddressedtheirpotential.Whilstthis
considerableresearchintothemultiplebenefitsofETR/EFRhashelpedtostimulatethe
implementationofETR/EFRsinsomeEUandothercountries,itisnowrecognisedthatthemain
barrierstoETR/EFRarelargelypoliticalandinstitutional,requiringcommonunderstandingbetween
2See http://ec.europa.eu/europe2020/making-it-happen/country-specific-recommendations/index_en.htm
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4
manystakeholdersandappreciationofthedifferentnationalcontextswithinwhichETR/EFRcan
work.
Theeconomyandthetaxsystem(inparticulartheenvironmentaltaxsystem)inSpain
Between1995and2008theGDPgrowthrateexceeded3%andsince2008Spainhasbeen
seriouslyaffectedbythefinancialcrisiswithnegativeGDPgrowthratesandanincreasein
unemploymentforecastedtobeabout25%in2013.
Duringtheyearsofthefinancialcrisisthedeclineingovernmentrevenueswasaccompanied
byanincreaseinnetborrowingleadingtoafurtherriseingovernmentdebt.Until2008the
Spanishgovernmentreducedthegrossdebttoabout39.8%ofGDPanditisforecastedthat
thegrossdebtwillriseto87%in2013(EC,2012).
Theoveralltax(includingsocialsecuritycontribution(SSC))toGDPratioofSpainisbelowEU
average(ranked18th
inEU27)in20103.Theshareofrevenuesfromlabourtaxesandsocial
securitycontributionisclosetoEUaverage.However,theshareofSSCpaidbyemployersis
relativelyhigh(ranked6th
ascomparedtorank24th
forSSCpaidbyemployees)(Eurostat,
2012).
TheshareofindirecttaxtoGDPisoneofthelowestintheEU(rank26th)andthesharesof
VATaswellasenvironmentaltaxestoGDParethelowestintheEU,i.e.ranked27th).When
expressedasashareoftotaltaxationthenSpainranked25th
incaseofenvironmentaltaxes
in2010.
About
10
years
ago
the
share
of
environmental
taxes
to
GDP
amounted
to
2.3%
and
declinedto1.6%in2010.TheEUaverageisabout2.4%withDenmarkandtheNetherlands
havingahighestshareof4%.ThefallintheshareofenvironmentaltaxrevenuestoGDPdid
notonlyoccurinSpainbutmoreorlessinmanyEUmemberstatesasthissharedropped
from2.8%in1999to2.4%in2010attheEU27level.
ThereareseveralenvironmentaltaxesinplaceinSpain.Spainranks26th
inEU27intermsof
revenuesgeneratedfromenergytaxesand18th
whenconsideringvehicletaxationasashare
ofGDPin2010.Theshareofpollutionandresourcetaxationisalsooneofthelowestinthe
EU.
TheSpanishenergytaxationschemeheavilyreliesontaxesleviedontransportfuels.
However,petrolanddieseltaxesareratherlowwhencomparedwiththeneighbouring
countries:thetaxratesare43%(29%)higherincaseofpetrol(diesel)inFranceandthetax
differenceislowerwhencomparedwithPortugal(petrol38%anddiesel11%)4.Naturalgas
usedforheatinginzeroratedandtheproductionandimportofelectricityistaxedwithan
advaloremtax,i.e.thetaxrateis5.113%.
3
Eurostat, 2012, Taxation trends in the European Union Data for the EU Member States, Iceland and Norway,2012 edition, Luxembourg, Publication Office of the European Union.4Calculation is based on data presented in DG TAXUD Excise Duty Tables as of July 2012
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Thebaseforvehicletaxationforprivatevehiclesdiffersbetweentheacquisitionofavehicle
andtheannualvehicletax.TheformertaxschemeisbasedonvehiclesCO2emissionsandin
thecaseofthelattertherateissetbasedontheenginerating. Thetaxratesaresetatthe
nationallevelbutinadditiontheautonomousregionalGovernmentsareallowedtolevy
specialtaxes.Thetotalrevenuefromvehicletaxationseemstobenotoverlyhighasthe
shareofvehicletaxationrevenuestoGDPishigherincountries,suchasGermanyandthe
UK,whichonlylevyanannualvehicletax.
TheSpanishfiscalsystemallowsautonomousregions(calledAutonomousCommunities)to
regulatetheirowntaxeswiththelimitationthattheycannotsettaxeswhentheyalready
beingintroducedbytheStateGovernment.14outofthe17autonomousregionsaremaking
useofthisregulationandintroducedenvironmentaltaxes(seeAnnexforanoverview).
Severalautonomousregionsintroducedresourceandpollutiontaxesinareaslikewater
management,water
pollution,
waste
and
air
pollution.
NaturalgaspricestoconsumersaregenerallylowcomparedwithotherEUmemberstates.
Thisisincontrasttoelectricitypricestoconsumerswhichwerethe6th
highestfordomestic
consumes(households)and10th
highestforindustrialconsumersinthesecondhalfof
20115.AspecificfeatureintheSpanishretailelectricitymarketisthesocalledtariffdeficit
whicharoseastheresultoftariffregulationsbytheSpanishGovernment.Thetariffdeficit
amountstoabout24billion(morethan2%ofGDP)ofwhichtwothirdsareguaranteedby
theGovernment.Electricitytariffscomprisetwoelements:(1)agenerationtariffthatisset
bymarketprices;and(2)anaccesstariffthatisregulatedsetbythegovernmenttocover
thefixed
costs
of
the
system,
i.e.
the
costs
of
operating
transmission
and
distribution
networksaswellasothercostssuchasFeedintariffs,capacitypaymentsandpremiums
paidtocogenerationplant.Thereasonforthetariffdeficitisthattheregulatedtariffsdonot
alwayscoverthecosts(EC,2012). InMarch2012,theGovernmentadopteddifferentpolicy
measuresaimingtoreducethetariffdeficitincludinganincreaseintheregulatedtariffofup
to7%.
Thelatestdevelopmentinthetaxationschemeofrenewablesisalsoimportanttohighlight.
TheSpanishfeedintariff(FiT)schemeisinplaceforseveralyearsaimingtoaccelerate
investments
in
renewable
energy
technologies.
The
basic
structure
of
the
scheme
was
establishedin1998andsincethenmodified.Atthebeginningof2012theSpanish
governmenttemporarilysuspendedtheFiTapplicationsforrenewableenergyprojects
startingoperationsafterJanuary2013.However,severalautonomousregionsintroduced
newtaxesaffectingelectricitygeneration,includingrenewableelectricitygeneration
technologies.TheRegionofCastillalaManchaintroducedin2011anewtaxleviedonwind
turbines.Theratedependsonthenumberofturbinesofawindfarmandissetbetween
498perturbineforawindfarmwithturbinesbetween3and7and1233perturbinefora
windfarmwithmorethan15windturbines.Windfarmswithlessthan3turbinesare
5Source: Eurostat data nrg_pc_204: domestic consumers with a consumption between 2 500 kWh and 5 000
kWh and data nrg_pc_205: industrial consumers with a consumption between 500 MWh and 2 000 MWh
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exemptfromthetax.Inaddition,thisregionincreasedtherateofnuclearproductionof
technologyfrom1.5perMWhto2.1in2011.TheRegionofGaliciaintroducedataxon
transmissionanddistributionactivitiesin2011.Thetaxratesisbasedonthelengthofeach
network.ItisalsoreportedthattheRegionofCastillayLeonplannedtointroducenewtaxes
onelectricitysectorin2012includingataxonhydropowerplantswhichshouldbebasedon
thecapacityofthereservoiraswellasontheinstalledpower.Anothertaxisplannedto
coverthenetworkandinadditionataxonwindturbines.Thetaxbaseofthelatteroneis
eachwindturbineandtheratesaresetdependingonthecapacityreaching12000fora2
MWturbine.
Spainfaceslargechallengesinthefieldsofwaterandwastemanagementandairpollution.
Forexample,Spainisoneofthe11EUMemberStatesthatexceededtheinternational
emissionsceilingin2010,andamongthetwoMemberStates(SpainandDenmark)that
exceededthreeceilings(fornitrogenoxides(NOx),nonmethanevolatileorganiccompounds
(NMVOCs)and
ammonia
(NH3))
6
.Furthermore,
the
EC
reports
that
water
tariffs
in
Spain
are
amongstthelowestintheEU.Inparticular,certainregionalwaterpricingpoliciesgive
farmerslittleincentivetoreducewateruseforirrigation.7
Spainprovidesfinancialsupporttotheenergysector.Thesesupportschemesaregivento
hardcoalminingaswellasinformoffueltaxexemptionsandreductions.Thetotalsumof
thesefinancialsupportschemeswereplannedtoamounttoabout2,655millionin2010
(OECD,2011).Thissubsidyfigureaccountsforabout19%oftotalenergytaxrevenuesin
2010.
TheillustrativepotentialofenvironmentaltaxesinSpain optionsforreformbasedonEU
memberstatesestablishedpractice
Spainismakinguseofenvironmentaltaxesbuttherevenuesgeneratedfromthemarelowin
comparisontotheEU27average.ManySpanishtaxratesareratherlowanditcouldthereforebe
anticipatedthattheycouldbeincreasedtherebyimprovingtheenvironmentaleffectivenessaswell
asraisingtherevenues.ThisaspectisaddressedbytheECinthe2012ECcountryrecommendation
forSpainaspartoftheEurope2020strategy:
Spainthushassomeroomtoimprovetheefficiencyofthetaxsystembyshiftingrevenue
towardstheleastdistortingtaxessuchasthoseonconsumption(inparticularVAT)and
environmentaltaxes,whichwouldbeconsistentwithfiscalconsolidationefforts8.
Growthfriendlyfiscalconsolidationwouldincludeimprovingtheefficiencyofthetaxsystem
byshiftingthetaxburdenfromlabourtowardsconsumptionandenvironmentaltaxes,
broadeningtaxbasesandrationalisingsubsidies9.
6See http://www.eea.europa.eu/highlights/eleven-member-states-exceed-
air?utm_source=EEASubscriptions&utm_medium=RSSFeeds&utm_campaign=Generic7http://ec.europa.eu/europe2020/pdf/nd/swd2012_spain_en.pdf8Reference:http://ec.europa.eu/europe2020/pdf/nd/swd2012_spain_en.pdf(page14)
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TheGovernmentofSpainintroduceddifferentconsolidationmeasuresduringthelastyears(EC,
2012).Thefiscalconsolidationprocessaddressestherevenueaswellastheexpendituresideofthe
nationalbudget.Themainemphasisofthisprocesswasdirectedtothereductionofexpendituresas
thiswasoftenseenastobemoresustainableascomparedtorevenuedrivenpolicies.However,
duringrecentyearstheinsightsofhavingamorebalancedapproachbetweenausterityandtax
raisingpolicieshavebeentakenoverashighlightedbyscholarsfromtheIMF:Unlikeprevious
researchonfiscalconsolidation,ourfindingsshowthatraisingtaxrevenueiskeytosuccessfuldebt
reductionincountrieswithlargefiscaladjustmentneeds..Measurestoincreasetaxationshould,
however,bedesignedinawaythatdoesnotharmefficiencyandminimizesdistortion,particularly
wheretaxesasapercentageofGDParealreadyhigh.Simplifyingthetaxsystembyreducing
excessivetaxratesandbroadeningthetaxbasecouldhelpenhancerevenuecollectionwhileshifting
theburdenoftaxesawayfromproductiveinputs.Forexample,financialsectorandcarbontaxation
mayhelpthebudgetwhileatthesametimeaddressingefficiencyconcerns(IMF,2012)10.
ConcretestepshavebeenimplementedinEuropeancountriesinovercomingthefiscaldeficitsby
raisingadditionaltaxrevenuesalsofromenvironmentaltaxes.Forexample,Greeceincreased
drasticallythetaxratesleviedonunleadedpetrolby87%anddieselby36%betweenJanuary2009
andMay2010andItalydidthesameasitincreasedthetaxratesleviedontransportfuelsby27%
(unleadedpetrol)and43%(diesel)betweenApril2011andJune2012.AspartoftheIrishfiscal
consolidationstrategyacarbontaxwasintroducedattheendof2009.Initiallythetaxratewasset
at15pertonneofCO2butadoublingofthetaxrateto30until2014wasannouncedintheIrish
NationalRecoveryPlan20112014.
Severalpolicies
are
already
in
place
or
have
been
announced
by
the
Spanish
Government
during
recentmonths. TheEUEmissionTradingSystem(EUETS)isacornerstoneoftheEUsclimatepolicy
andtheauctioningofcarbonallowanceswillbetherulestartingwiththethirdtradingperiodin
2013.SpainlikeallotherEUmemberstatesarerequiredtointroducethemandatoryauctioning
althoughithastobementionedthatauctioning,i.e.earlyauctionsalreadystartedin2012inSpain
intheformofearlyauctions,i.e.theauctioningof20132020allowance beforethethirdtrading
periodstarts.TheyincludetheauctioningofETSallowances,whichwillstartfrom2012.Other
policiesindicatedareincreasesinenergytaxes11
andalsoplanstoreviseelectricitytariffsby7%12
andtotacklethetariffdeficit13
aswellastosuspendandreformthefeedintariffsystemfor
renewables.
9Reference:http://ec.europa.eu/europe2020/pdf/nd/swd2012_spain_en.pdf(page6)
10See also the report Restoring Fiscal Sustainability in Spain by Beynet et al. (2011)11See: http://uk.reuters.com/article/2012/07/14/uk-spain-economy-reforms-idUKBRE86C0WT2012071412See: http://articles.marketwatch.com/2012-03-30/economy/31258687_1_budget-deficit-higher-taxes-
government13See:
http://www.utilityweek.co.uk/news/news_story.asp?id=197061&title=Spain+plans+tariff+deficit+reforms
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Whenassessingthecurrentenvironmentaltaxationschemethefollowingoptionscouldbe
anticipated:
Increasingthetaxesleviedonenergyproducts;i.e.ImpuestosobreHidrocarburos(Taxon
Hydrocarbon);ImpuestosobreCombustiblesDerivadosdelPetrleo(TaxonFuelOil
Derivatives);ImpuestosobreVentasMinoristasdeDeterminadosHidrocarburos(Taxon
RetailSalesofSpecificHydrocarbons).
Asmentionedabove,thetaxesleviedontransportfuelsarelowerthantheonesleviedin
theneighbouringcountries.Inaddition,thetaxratesonpetrol(diesel)wereraisedby8%
respectivelyby13%sinceJanuary200214
.Theseincreasesintaxrateswerequitelowwhen
comparedwiththesituationinPortugalwheretherateswereincreasedby70%and49%
duringthesameperiod howeverthetaxrateswerelowerin2002.Thismeansthatthetax
rateshavedeclinedinrealtermsandtheshareoftaxesinpetrolanddieselpricesfalland
aremuchlowerthaninneighbouringcountriesandotherEUmemberstates(seeTables1
and2in
the
Annex).
ThepotentialofreformingtheSpanishenergytaxationisanalysedindifferentresearch
projectstherebyillustratingtherevenuepotentialofenergytaxation.Thesescenariosare
basedonenergytaxreformswhicharemoreorlessbasedontheproposalofrevisingtheEU
EnergyTaxationDirectiveof2003(EC,2003).TheproposalwasputforwardbytheECin
2011(EC,2011)andisstillundernegotiationsbetweentheECandEUmemberstates.
TheproposalforeseestomodifythewayenergyproductsaretaxedbyconsideringtheirCO2
emissionsandenergycontent.Thiswouldmeanthatenergytaxeswouldbesplitintotwo
components:aCO2
part
and
an
energy
part.
ThesimulationresultsofLabandeira(2011)areshowingthatrevenuesfromenergytaxes
couldbeincreasedbyupto7.2billionuntil2018,i.e.anincreaseofmorethan50%
comparedtothetotalenergytaxrevenuesofabout14billionin2010.
Anotherstudy(VividEconomics,2012)estimatesadditionalrevenuesfromanenergytax
reformofabout9billionin2018increasingtomorethan10billionin2020.Thisstudyalso
comparesthemacroeconomicimpactsoftheenergytaxreformpackagewithincreased
indirect
or
direct
taxes.
The
authors
are
concluding
that
energy
taxes
would
cause
less
economicharmperunitofrevenuethandirect(i.e.income)orindirecttaxes,whilealso
producingotherbenefits(VividEconomics,2012).
TheSpanishtransporttaxationschemeincludesthefollowingtaxes: ImpuestoEspecial
sobreDeterminadosMediosdeTransporte(DutyonSpecificMeansofTransport);Impuesto
sobreVehculosdeTraccinMecnica(empresas hogares)(Carregistrationtax:companies
households).Asmentionedabove,theoverallrevenuesfromthesetaxescanbedescribed
aslowwhenexpressedasashareofGDP.
14Calculation based on data published by DG Energy History from 2005 onwards at
http://ec.europa.eu/energy/observatory/oil/bulletin_en.htm(accessed on August 20, 2012)
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ThreeSpanishautonomousregions(Andaluca,AragonandMurcia)15
introducedcarbon
taxesaspartoftheirairpollutiontaxsystem.TheoveralldesignoftheseCO2taxratesdiffer
widelyfromcarbontaxationschemesimplementedinEUmemberstates,suchasSweden,
Finland,IrelandorDenmark.Furthermore,theCO2taxratesinthesethreeautonomous
regionsarealsoratherlowcomparedtotheEUmemberstatesconsideringforexample,that
thetaxratefordumpingpollutinggasesintotheatmosphereinAragonisequalto200/kt
(i.e.0.2pertonneofCO2emitted)(Eurelectric,2012a)ascomparedtothecurrentSwedish
CO2taxrateof118pertonneofCO2.
SeveralotherAutonomousCommunitiesimplementedairpollutiontaxesleviedonSO2and
NO2.Againthetaxratesareandareintherangeof33to94pertonneSO2inSpainand
ratesareintherangeof50to140pertonneNO2inSpain16
.Thesetaxratesareonlya
fractionofSO2taxratesimplementedinDenmark2,680pertonneSO2orinSweden
5,370per
tonne
NOx.
It
is
noteworthy
to
state
that
this
comparison
provides
avery
rough
indicationofthedifferencesandwouldrequireamoredetailedanalysisoftheairpollution
taxationschemesformakingacompleteassessment.
TherevenuesfromSpanishairpollutiontaxesdroppedfrom28millionin2005to7
millionin2010whichisratherlowwhencomparedtotheDanishsituationwherethe
sulphurandnitrogentaxraisedabout10millionin2010.
WastepolicyisanotherenvironmentalpolicyareainwhichsomeAutonomousCommunities
introducedenvironmentaltaxes.Forexample,Catalonialeviedalandfilltaxonwastewitha
rateof12pertonneandwithahigherrateof21pertonnewastefrommunicipalities
withoutseparate
waste
collection
schemes.
In
addition,
municipal
waste
delivered
to
an
incinerationissubjecttoataxof16pertonne17
.
Europeanpracticeindicatesthatthesetaxescouldbeincreasedconsideringthatthelandfill
taxratesinIrelandarecurrentlyamountingto65pertonne18
andintheUKthestandard
rateissetat64(82)19. TherevenueoftheIrishlandfilltaxrateamountedto43millionin
2010comparedto25millioninCatalonia(2009).
AllrevenuesaccountedfromanywasterelatedtaxesinSpainamountedtoabout315
millionin2010,i.e.representingashareof0.03%ofGDP,ascomparedtolandfilltax
revenuesintheUKofabout1billion(1.34billion),ashareof0.06%ofGDP.
WatertariffsinOECDcountriesarepresentedinFigures1and2intheannex.It
demonstratesthattheSpanishwatertariffsareoneofthelowestintheOECD/EUmember
states.Differentwaterrelatedtaxationschemesaddressingwatersupplyaswellas
15Eurelectric, Taxes and Levies on Electricity in 2010.16
See the Eurelectric report for a more detailed discussion on the design of these taxes.17
SeeI.PuigVentosa,LandfillandWasteIncinerationTaxesTheSpanishCase.
http://ec.europa.eu/environment/waste/pdf/strategy/5.%20Landfill%20and%20incineration%20taxes%20in%
20Spain%20Ignasi%20Puig%20(2).pdf(accessedonAugust20,2012)18See: http://www.edie.net/news/news_story.asp?id=19770&channel=5&title=Landfill+ta19
See:http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pa
geExcise_ShowContent&propertyType=document&id=HMCE_CL_000509#P311_23550
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sanitationservicesareinplaceinSpainbutnotatthenationallevelandinsteadatthe
autonomousregionallevelwithlargedifferencesindesignandtariffrates.
Therewouldbesignificantrevenuepotentialfromintroducingageneraltaxforallutilities
abstractingwater.Waterabstractiontaxescantacklewithdifferentenvironmental
challenges,suchasleakageandspillsforwatersupply.Butifthetaxappliesto90%of
abstractedvolumes,thentherewillbeastrongincentiveforutilitiestoreinforcetheir
capacitytoreactquicklyagainstspills,whichmaybringleakageratesdownfromratesof30
40percentprevalentinmanyareas,seeforexampletheexperienceinDenmark.
Urbanwastewaterplantsarenotalwayscomplyingwiththestandardsforeffluent
dischargesallyearround,thisisbecausefullcompliancecanbetechnicallydemandingand
requireadditionalequipment.Introducingtaxesforendofpipedischargesoneachofthe
relevantemissions(N,PandCOD),balancedagainsttheestimatedbenefitsofcleanwater,
wouldprovide
incentives
to
improve
on
compliance.
Similar
taxes
could
be
applied
to
major
industrialemitters,whererelevant.TheNetherlandshasbeenthepioneerwithtaxesfor
emissionstosurfacewaters.ConsideringtheimportanceoftourisminSpain,aclear
measuretosecurewaterqualitywillbelikelytoyieldeconomicreturns
Thephasingoutofthefinancialsupportforthecoalsectorandtheabolishmentoffueltax
exemptionswouldalsofreeuprevenuesandraisetaxrevenueswhichcouldbeusedforthe
fiscalconsolidationprocess.
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11
Reference
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Annex
AnoverviewofenvironmentaltaxesimplementedintheAutonomousCommunities
Andalusiawatermanagement;coastalwaterdischarge;airpollution(includingCO2
emissions);hazardouswaste;radioactivewaste
Aragonairpollution(includingCO2emission);environmentaldamagecausedbylarge
departmentstores;environmentaldamagecausedbytheinstallationofcabletransport;
othertransport;watermanagementandpollution
Asturiaswatermanagement
BalearicIslandswatermanagement
CanaryIslandsenergy
Cantabria
waste
management;
plastic
bag;
water
management
and
water
pollution
CastilleLaManchawatermanagementandpollution;hazardouschemicals;electricity
production(nuclear);airpollution
Cataloniawatermanagementandpollution;waste
Extremaduraelectricityproduction;waterpollution
Galiciawatermanagementandpollution;airpollution;environmentaldamagecausedby
someusesofwatersfromreservoirs
LaRiojawatermanagement
Madridwaste;waterpollution
Murciaairpollution;coastalwaterdischarge;waste;watermanagement
Navarrawatermanagementandpollution
Source:OECD/EEAdatabaseoninstrumentsusedforenvironmentalpolicyandnaturalresource
management(http://www2.oecd.org/ecoinst/queries/index.htm,accessedonAugust7,2012
Table1:Percentageoftaxesindieselpricesfornoncommercialuse(in%)
2003 2004 2005 2006 2007 2008 2009 2010 2011
Spain 56.2 52.7 46.7 44.9 45.3 40.5 49.6 46.3 42.5
France 65.8 63.5 57.2 55.1 55.4 50.1 59.1 53.8 49.1
Portugal 56.8 55 50 49.7 51 45.8 52.9 48.6 45.3
Italy 62.6 59.6 53.8 52.2 52.8 48.1 55.8 51.5 48.6
UK 74.1 72.4 66.7 64.5 65.3 57.8 65.4 62.8 58.6
Source:IEA,EnergyPrices&Taxes,2nd
Quarter2012
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Table2:Percentageoftaxesinpremiumunleaded(RON95)gasolineprice(in%)
2003 2004 2005 2006 2007 2008 2009 2010 2011
Spain 62.3 59.4 55.3 52.6 52.1 49.5 55.9 52.2 48.8
France 74.3 71.9 67.1 64 63.7 61.1 66.6 61.5 57.1
Portugal 68.1 66.5 62.8 60.9 61.4 59 63.9 59.5 56.4
Italy 67.8 66.3 62.9 60.5 60.1 57.5 62.5 58 55.3
UK 75.5 73.6 69.2 66.6 66.7 61.9 67.8 63.8 60.3
Source:IEA,EnergyPrices&Taxes,2nd
Quarter2012
Figure1:
Unit
price
of
water
supply
and
sanitation
services
to
households
including
taxes,
in
OECD
countries,2008(unit:USDpercubicmetre)
Source:OECD,2010,PricingWaterResourcesandWaterandSanitationServices,Paris.
7/27/2019 EEA Briefing Note for ETR Workshop_Madrid
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Figure2:Comparisonofunitpricesofwaterservicesandwastewaterservicestohouseholds,
includingtaxes,inOECDcountries,2008(unit:USDpercubicmetre)
Source:OECD,2010,PricingWaterResourcesandWaterandSanitationServices,Paris.
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