Environmental Taxes Can environmental taxes decrease carbon emissions?


Ecotax/ Green tax: Tax on products, and activities that are considered to be harmful to the environment.

Depletion: Losing a number or quantity of something.

Global Warming: An increase in the temperature of the earth's atmosphere (Greenhouse gases).

Double Dividend: It can reduce pollution, and reduce the overall economic costs associated with the tax system.

Value Added Tax: A tax on the amount the value of a product that has been increased at each stage of its production or distribution.

Pigovian tax: A tax created to correct inefficient market outcomes. It does so by being set equal to the social cost of the negative externalities.

What is the purpose of environmental taxes?

The purpose of environmental tax is to change people’s behaviors and make them more aware of their environment. The environmental tax could include carbon tax, waste disposal taxes, and taxes on pollution and other hazardous wastes. Many of the places that endorse environmental tax are seeing positive results. As the European Union's environmental tax revenues increase it also increases the GDP (“Environment Tax Statistics”). This is mostly because of the consumers who are eager to save money. They would be more likely to look for ways to reduce the things in their life that are taxed on. The green tax would amount to some 50 to 70 trillion dollars to help cities become more environmentally friendly(Qarehgozlou). All this extra money could go to good causes, and this would decrease the depletion of natural resources like gas.

Picture caption: This is a little girl holding a piece of paper that is saying she will or does take care of her planet by recycling. This shows that environmental taxes could help change the way children look at the world.

What can environmental taxes do the depletion of natural resources?

Taxing the usage of natural resources would decrease the depletion of them. This would force the costs to slow environmental destruction levels. Many people's eyes would be more open to considering the environment especially when they are getting taxed for it. Most of these taxes would be on everyday necessities like gas, and electricity produced by coal or gas plants (“Replace payroll tax with a carbon tax (Editorial)"). This type of taxes would create a healthier environment, because the people wouldn’t want to use so much of what is being taxed, decreasing usage. This wouldn’t change the amount of taxes but shifting what’s being taxed. David Roodman, a researcher associated with the Worldwatch institution in Washington, stated, “The government would still collect the same amount of money, just in ways that are fairer and would lead the economy in a healthier direction." If people start to use less of what harms the environment these taxes can greatly help reduce pollution/ carbon emissions.

Picture caption: Water represents a natural resource many people are struggling to get. If we use environmental tax it will decrease the usage of many natural resources like water.

How would we use environmental taxes to decrease carbon emissions?

Consumers who are eager to save money would be more likely to look for ways to reduce their carbon use because they are being taxed for it. A new source of tax revenues could be on carbon dioxide emissions. Many scientists believe that carbon emissions are the leading cause of global warming (Roodman). Although this would increase the cost of gasoline, the money would be used for personal income tax exemptions, and/ or a raise for the workers. According to the statistics in the European Union on environmental tax, from 2002 to 2014, the total environmental tax revenue increased by 2.2 % per year (“Environment Tax Statistics”). This would not only be beneficial for the environment, but the economy as well. This means that environmental taxes aren’t just there to tax you, but it is more centralized under revenue motivated and incentive motivated taxes.

Picture caption: This is a town covered in smog because of air pollution. If the usage of cars goes down so will the amount of carbon dioxide/ greenhouse gasses.

What are revenue motivated and incentive motivated ecotax?

Incentive and motivated environmental taxes are taxing products that aren’t good for the environment and giving tax reliefs in exchange for environmentally-friendly behavior. These ecotax policies are meant to force the market to consider their environmental impacts. One of these impacts are transportation. Transportation is widely looked at as the biggest greenhouse gas producer, but not according Law Street News, “The global livestock industry contributes more greenhouse gas emissions than cars, planes, trains, and ships combined” (Zub). This tax is very revenue motivated, because it would force people to buy less meat which means less greenhouse gasses. On the other hand is incentive ecotax an incentive tax would be that every dollar raised in pollution taxes can be cut from income and other taxes. An example of that tax shift would be that the european union’s total revenue (2014) was EUR 343.6 billion (“Environmental Tax Statistics”). This shows how much money both types of environmental motivated taxes would create. No matter the type of ecotax if would definitely create a positive double dividend.

Picture caption: If people start to use energy efficient cars it will not only decrease carbon emissions, but it will give people incentives to use green cars.

What is the double dividend, and what will it help?

If we address ecotax it’ll create a double dividend that will help decrease pollution, and reduce the overall economic costs associated with the tax system. This double dividend would create beneficial results that are what most environmentalist believe greenax will do in the long run. Once these taxes reach their full potential their impact would likely be to cut pollution and resource depletion (Roodman). By decreasing pollution this will create cleaner air and water, leading to a healthier environment. Also when these taxes are implemented they will definitely create a healthier environment, and shift the taxes. According to The Sceptical Economist, “There certainly would be some additional revenue. We may not be able to significantly lower income and related taxes, but some alleviation would still be possible” (“Carbon Tax as A Double Dividend”). This would shift the labor based taxes to environmental tax. Shifting the taxes wouldn’t just create extra revenue, but it also creates a healthier environment.

Picture caption: One of the ways that the double dividend can help is it will help protect the environment and many habitats other than your own like this snail's environment. This will create a cleaner environment for every living thing.

Created By
Maecy Shahab

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