Much better use can and must be made of taxes to help reduce pollution and greenhouse gas emissions
13 July 2015
Posted by: Author: OECD
Much better use can and must be made of taxes to help reduce pollution and greenhouse gas emissions, concluded the participants of the 6th Global International Tax Dialogue conference
Taxes are potentially among the most effective ways of cutting pollution and greenhouse gas emissions, but they are currently – with very few exceptions – underused; and even where used, they are frequently designed in a sub-optimal way.
In the lead up to COP21, 300 senior tax and environment policymakers, tax administrators and experts from more than 90 countries met in Paris this week to identify practical ways of harnessing the power of taxation as an environmental policy tool.
The International Tax Dialogue (ITD) is a joint initiative of the European Commission (EC), Inter-American Development Bank(IDB), International Monetary Fund (IMF), Organisation for Economic Co-operation and Development (OECD), World Bank Group and Inter-American Center of Tax Administrations (CIAT). The ITD facilitates international dialogue on tax policy and administration.
In his opening remarks, Secretary-General of the OECD Angel Gurría, said that ”the partners of the International Tax Dialogue share the conviction that putting a price on carbon alone is not sufficient to address the environmental challenges we face, but it is an essential part of the solution.” (Read the speech)
Competitiveness and equity concerns are often-cited as barriers to using environmental taxes. Conference discussions confirmed that these are important concerns, but observed that in general they need not block progress. To the contrary, carefully designed taxes can help achieve environmental objectives and establish more growth- and employment-friendly tax systems at the same time, while also keeping adverse equity impacts to a minimum.
This article first appeared on oecd.org.