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Politicians have so far only 'nibbled' at using green fiscal reform, says study
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Green taxes would benefit environment and employment


26th October, 2009

A major shift towards green taxes and 'pay as you burn, not pay as you earn' would benefit the environment and the economy

Doubling green taxes would boost employment and help the UK meet its greenhouse gas emissions reduction targets by 2020, says a new study.

The final assessment from The UK Green Fiscal Commission, set up two years ago to look at the consequences of a major shift towards green taxes, says the UK should seize the need to reduce the national debt by raising revenue through green rather than conventional taxes.

It says the public could support such a shift if persuaded that green taxes 'really will be instead of other taxes'.

Home energy

Green taxes, the Commission says, would not only give an extra incentive to householders to upgrade their homes, but would also generate revenues that could be used to provide a cushion for vulnerable or poor householders before their homes are improved.

The study says higher taxes on road transport and aviation, lower taxes on employees and investment of some of the tax revenue in the low carbon sector, for example home energy efficiency, would boost employment levels by almost 500,000 by 2020.

'If, for example, the tax increase is on energy and the tax decrease is on the business costs of employment (such as a reduction in employers’ social security contributions), then winning sectors and companies will be those with relatively high labour-, compared to energy-, intensity,' the authors write.

Greenpeace welcomed the findings but said it was concerned that the Treasury was blocking any moves for green taxes, particularly those that would fall on the aviation sector.

Useful links

The UK Green Fiscal Commission

See also
Comment: we should all know how RBS spends our money
Public oppose carbon pricing


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