Shift taxes to pollution, says new advocacy group

Europe needs a strategy to shift taxes away from labour towards pollution and resource consumption in order to boost innovation and create jobs, according to a new pressure group being set up in Brussels by T&E and other environmental organisations.

Green Budget Europe was launched in early November, and is a coalition of academics, researchers, politicians, businesspeople and NGOs. It will advocate for Europe’s national and transnational economies to respect the environment in taxation and charging policy, and to make public spending consistent with sustainability goals.
 
Its founder director is James Nix (pictured), a T&E board member who comes to Green Budget Europe (GBE) from the Irish environmental NGO An Taisce. He said: ‘More than 80 years since the economist John Maynard Keynes first talked about how we destroy “the splendours of nature” because we don’t give them economic value, we are still spending billions of taxpayers’ money on subsidies and public support for polluting and climate-disrupting activity. The current price of carbon under the EU’s emissions trading scheme is €6 a tonne, which is about one sixteenth of the cost of the damage caused by carbon emissions.’
 
GBE’s short-term aim is to share knowledge about how to use fiscal instruments to achieve environmental goals. Cities like Amsterdam, Copenhagen, Freiburg, Malmö and Milan show there are solutions that have been tested which other cities could easily adopt, such as less favourable treatment of company cars and congestion charging in areas where there are less harmful alternatives to polluting transport. The basic principle of these measures, deeply rooted in EU policymaking, is to make polluters pay now, instead of leaving future generations to pick up the bill.
 
‘The strong variations in fuel taxes also cause problems,’ Nix added. ‘Countries such as Luxembourg, Austria and Slovenia continue to attract lorry companies with low fuel prices. By phasing out the underlying low tax rates, Europe will help tilt the balance in favour of fuel-efficient transport, regional markets and local supply networks. For example, in the US and Canada each state is allowed to set its own fuel taxes, but state grants are dependent on how low lorry traffic is within the state, not how much fuel is sold.’
 
GBE has existed for six years as a project within a German initiative, FÖS (Forum for an Ecological and Social Market Economy), but now exists at EU level with an office in Brussels. Among the other organisations which have helped set up GBE are the European Environmental Bureau, the Finnish Association for Nature Conservation, and the Clean Air Action Group from Hungary.
 
GBE can be contacted at gbe@green-budget.eu.