Upload
luc-glaze
View
219
Download
1
Tags:
Embed Size (px)
Citation preview
Danish experiences
Søren Dyck-Madsen
The Danish Ecological Council - DEC
Revenues from environmentally related taxes in per cent of GDP
Distribution of the Danish Tax Revenue in 2000 in billion DKK
Income taxes Company taxes
Green taxes VAT
Land tax Others
Danish Green Taxes in % af GDP
0
1
2
3
4
5
6
70
72
74
76
78
80
82
84
86
88
90
92
94
96
98
20
00
20
02
20
04
% o
f G
DP
Green taxes can be high without harming industrial competitiveness
1: Finland
2: USA
3: Sweden
4: Denmark
5: Taiwan
Ranking of world growth competitiveness according to a 2003 report by the World Economics Forum
6: Singapore
7: Switzerland
8: Iceland
9: Norway
10: Australia
Some examples of Danish Green taxes
Tax on Organic Chlorinated Solvents
Tax on Growth Promoters (Antibiotics) accompanied by a voluntary agreement with Agriculture
Danish Transport Taxes
Annual Consumption of Taxed Organic Solvents
0
200
400
600
800
1000
1200
1400
1992 1993 1994 1995 1996 1997 1998
Tonnes per year
Dichlormethan Trichlorethylen Tetrachlorethylen
The (small) Tax on Organic Solvents was introduced in 1996
Tax on Growth Promoters / Antibiotics
0
5
10
15
20
25
30
35
40
1997 1998 1999 2000 2001 2002 2003
Mio. DKK
Cars per 1000 Inhabitants in 1995
Cars per 1000 inhabitants in 1995
195211
220258270
302
340351360363
366371
386411418
433445447457
463465467
495
552563563
0 100 200 300 400 500 600
Poland
Greece
Hungary
Portugal
Ireland
Czech rep.
Denmark
Spain
J apan
NL
UK
Finland
Norway
Sweden
Belgium
France
Iceland
Austria
Schwitzerland
New Zealand
Australia
Canada
Germany
Italy
USA
Luxembourg
Number of Danish Vehicles
0
200.000
400.000
600.000
800.000
1.000.000
1.200.000
1.400.000
1.600.000
1.800.000
2.000.00019
80
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
Private cars Vehicles 2.000-3.500 kg
Driven Kilometers
0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.000
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
Mio. driven km
”Rules” for anEnvironmental Tax Reform
Should target relevant and important environmental problems and be effective to reduce those problems
Should be distributional neutral – increasing green taxes should be followed by reducing other taxes in a way so that the poorest will not be hit the hardest
Should be revenue neutral – a reform is not created to increase state incomes and might not be accepted by the public if increasing the overall tax burden
Should additionally reduce environmentally harmful subsidies
Environmental problems to be Targeted by Economical Instruments
Green House gases – especially CO2 – but also industrial GHG’s like SF6, HCFC
Overuse of natural ressources Too much traffic Too much energy used Protecting ground water Use of hazardous Chemicals Too much waste produced Avoid urban sprawl
A real Danish tax shift
Experiences and Recommendations
Green taxes are very useful targeting environmental problems and recommended by EU-Commission, the OECD and many others
But it is hard to create public understanding and acceptance for green taxes as part of an environmental tax reform in the public and in industry
Information and Public Acceptance
It is therefore very important to give good information about the environmental problems that is going to be targeted and to underline that Environmental tax Reforms do have two sides:
Taxes on environmental harmful products, behaviour, land-use and non-renewable resources
Spending of revenues from the green taxes to lower taxes on labour, secure the social fair economic distribution, secure industrial competitiveness, subsidising environmental actions like improving energy efficiency and others
Revenues
Some green taxes do create revenues even though the tax itself are meant to reduce the tax base
Other green taxes are meant to be reduced to zero as the tax fulfils it’s own purpose and eliminates the use of the product
How to Spend the Revenues
Earmarking of revenue for environmental purposes – which will increase the overall tax burden
Revenue in the State Budget to finance overall State expenditures. Expenses for environmental purposes are decided in the State Budget
A mixture of the two – which can be very convenient in practical politics
Returning of Revenues should fulfil several goals
Social impacts should be neutral or slightly positive
Industrial effects on competitiveness should be neutral or at least not so heavy that they forces the companies to close down or move abroad
Should be revenue neutral – or a very well targeted way of raising revenue needed instead of increasing other taxes such as income taxes
Revenues can stabilise green politics
Revenues are not the normal goal for green tax reforms
But do consider the revenues anyway since revenues tend to be rather steady while governments change
But argue always with the benefits for the environment, for the national economy and for the employment
Public acceptance is the key problem for an Environmental Fiscal Reform
Inform about the environmental problems the EFR is going to target
Make the use/returning of the revenue very clear Neutralise regressive effects in income distribution Neutralise negative effects on industrial
competitiveness Consider to use parts of the revenue for additional
environmental purposes in order to ”give people something for the money” - But do remember that revenues from green taxes can be used for better hospitals too
Broad political coalitions in order to avoid misuse of green taxes
Because of the difficulties for the public to understand the construction of a green tax reform it is advisable to seek a broad coalition behind the green taxes in order to make the reform more stable and predictable for both households and especially for industry.
A broad coalition also minimises the risk that one or
more parties do misuse the visible parts of the green tax reform against the present government in an election campaign – as we saw in the Danish elections 2001.
The DEC 2002 proposal for a Danish Green Tax reform
The Danish Environmental problems should be reduced
The income distribution should not be changed
Industry’s competitiveness should not be harmed
The total tax burden on households and industry should be neutral
More jobs should be created
In economic terms the proposed Danish Tax Reform would shift additionally 9% of the total Danish tax revenue from income taxation to environmental taxes gradually from 2002 to 2010 – so the total revenue from environmental taxation in 2010 will make up about 18,5% of the total tax revenue.
Energy and GHG’s
Increase tax on extraction of oil and natural gas in the North Sea + 3.7 Increase carbon tax + 3.8 Increase energy tax for electricity in households + 6.3 Increase energy tax for oil, coal and natural gas in households + 8.5 Phase out rebates on carbon tax for energy extensive industry + 1.7 Lower rebates on carbon tax for energy intensive industry + 1.9 Taxing Carbon emissions from flaring from oil platforms + 0.3
All numbers in billion DKK - 1 billion DKK is apx. 33.5 billion HUF
Transport
Increase taxes on Petrol and diesel + 1.0 Introduce road pricing differentiated according to environmental
performance of cars + 10.8 Increase steps in the environmental car owner tax (steps moved 5 km/litre) + 2.0 Increase registration tax for energy ineffective cars + 1.0 Remove tax rebates for transport to job + 2.0 Tax fuel for airplanes and ferries/ships + 5.3
Tax diesel vehicles without particle filters – Reverse for installation of filters Neutral Tax fuel use for Public transport – Reverse as subsidy for labour
costs for drivers Neutral Tax energy extensive electrical appliances and subsidy energy effective
appliances Neutral
Others
Increase tax on pesticides + 0.1 Industry pays full tax on piped water + 0.7 Increase tax on chlorinated solvents + 0.0 Tax unwanted chemicals + 3.0 Increase tax on solid waste + 0.7 Increase tax on waste water + 0.5 Tax advertising, e.g. handouts, fliers, commercials, brochures + 4.0 Increase tax on PVC and phthalates + 0.1 Tax high pressure treated wood and timber + 0.0
Remove Environmentally Harmful Subsidies
Reorganize or remove subsidies for agriculture Remove subsidies for energy based on fossil fuels or nuclear More jobs and a broadened tax base gives an effect Savings in expenditures for environmental damage
Use of the Revenue / Neutrality
Reduce the rate of ordinary income tax low bracket from 5,5 % to 1,0 % - 30.3 Increase the income tax threshold with 5.000 DKK - 8.0 Reduce the VAT on organic food products and ecolabelled products - 2.0 Social compensations by increasing child allowances, educational aid, retired
peoples pensions and other social allowances - 6.0
Compensation for higher green taxes to industry according to labour expenses - 6.2 Funding for introducing cleaner technology - 2.5 Changing taxation and write offs for environmental friendly investments - 1.5
Increase investments in railway, tram, metro, bus light rail - 1.0
All together - 57.5
www.ecocouncil.dk/english/