Recent developments in the use of environmental taxes in the EU
The latest developments in the use of environmental taxes in the European Union, as discussed by the EU's environment Council at its informal meeting, are described in the summary of a draft report recently published by the European Environment Agency (EEA). According to the Commission, environmental taxes are major tools 'to get the prices right and to create market-based incentives for environmentally friendly economic behaviour'. The Commission currently uses environmental taxes to help implement both the 'polluter pays' principle and the 'user pays' principle and work on them is continuing in the EU and the OECD. 'The focus on environmental taxes is strengthening due to a number of trends,' say the report. Firstly, because the Kyoto GHG targets set for the EU and Member States are difficult to achieve without the help of additional instruments, including economic instruments and carbon taxation. Secondly, because the 'Cardiff-Gothenburg process' of monitoring progress towards integration of environmental requirements into sector policies includes the internalisation of external costs and creation of 'fair and efficient prices for which environmental taxes are a major instrument; and thirdly because the attraction of fixed and material factors such as energy, land and water as tax bases is increasing. The report covers: - recent developments in the use of green taxes; - effectiveness of environmental tasks; - taxes and integration of environment into sector policies; - how barriers to the introduction of environmental taxes can be overcome.