Environmental Fiscal Reform and its Contribution to a Green Economy - - PowerPoint PPT Presentation

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Environmental Fiscal Reform and its Contribution to a Green Economy - - PowerPoint PPT Presentation

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Environmental Fiscal Reform and its Contribution to a Green Economy Danish Practice, Lessons and Proposals Sren Dyck-Madsen The Danish Ecological Council EEB Green Budget Europe Conference Madrid 26.11.09 Why Green the Tax System?

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Environmental Fiscal Reform and it’s Contribution to a Green Economy Danish Practice, Lessons and Proposals

Søren Dyck-Madsen The Danish Ecological Council

EEB – Green Budget Europe Conference Madrid 26.11.09

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Why Green the Tax System?

  • Taxation must be a driver of innovation – green

markets must be created both by strict minimum rules and standards but also by getting the right price signals

  • Doing the right thing must pay off – ethics is not the
  • nly nor best instrument for saving the world
  • There is actually a double dividend

EEB – Green Budget Europe Conference Madrid 26.11.09

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Environmental Taxes for Energy, Transport and Pollution/Resources

EEB – Green Budget Europe Conference Madrid 26.11.09

Revenue in % of GDP Denmark

Source: Taxation trends in the EU, Eurostat 2007

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Denmark has the Largest Variety of Green taxes in the EU

EEB – Green Budget Europe Conference Madrid 26.11.09

EEA, 2006

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Level of Danish Environmental Taxes 1970 – 2010

EEB – Green Budget Europe Conference Madrid 26.11.09

Source: Danish Ministry of Taxation Danish Green Tax Reform 1994 - 1998 Danish Tax Freeze 2002 - 2009 (Fluctuations mainly due to the number

  • f new cars)
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1 2 3 4 5 6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009* 2010*

Level of Danish Environmental Taxes 1990 – 2010

EEB – Green Budget Europe Conference Madrid 26.11.09

Source: Danish Ministry of Taxation Green Tax Reform 1994 - 1998 Tax Freeze 2002 - 2008

All Green Taxes Car Registration Tax Other Green Taxes

Change of Government

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Danish Green Taxes 2009 in mio. Euro

EEB – Green Budget Europe Conference Madrid 26.11.09

4.648 Energy related Taxes all together 1.154 Petrol 1.228 Oil products 570 Natural Gas 1.383 Electricity 312 Coal Energy Taxes etc.

Danish EPA: Energy and Carbon taxes in Denmark has reduced the emissions of GHG / CO2 by around 10 %

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EEB – Green Budget Europe Conference Madrid 26.11.09

3.853 Motor vehicles taxation all together 58 Road use 272 Insurance levy 2.046 Car registration tax 1.478 Annual Car owner Tax Motor Vehicles Taxation

Danish Green Taxes 2009 in mio. Euro

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EEB – Green Budget Europe Conference Madrid 26.11.09

3.853 Motor vehicles taxation all together 58 Road use 272 Insurance levy 2.046 Car registration tax 1.478 Annual Car owner Tax Motor Vehicles Taxation Very Very Very Very high high high high Danish Danish Danish Danish registration registration registration registration tax tax tax tax gives gives gives gives good good good good possibilities possibilities possibilities possibilities for for for for greening greening greening greening and for and for and for and for introducing introducing introducing introducing electric electric electric electric cars cars cars cars

Danish Green Taxes 2009 in mio. Euro

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EEB – Green Budget Europe Conference Madrid 26.11.09

Certain Growth Promotants 64 Pesticides Clorinated Solvents 7 CFC's 141 Packaging 11 Sulphur SO2 812 CO2 Environmental Taxes

Danish Green Taxes 2009 in mio. Euro

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EEB – Green Budget Europe Conference Madrid 26.11.09

Certain Growth Promotants 64 Pesticides Clorinated Solvents 7 CFC's 141 Packaging 11 Sulphur SO2 812 CO2 Environmental Taxes If you can If you can If you can If you cant ban t ban t ban t ban them them them them tax them tax them tax them tax them

Danish Green Taxes 2009 in mio. Euro

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EEB – Green Budget Europe Conference Madrid 26.11.09

Certain Growth Promotants 64 Pesticides Clorinated Solvents 7 CFC's 141 Packaging 11 Sulphur SO2 812 CO2 Environmental Taxes Voluntary Voluntary Voluntary Voluntary agreements agreements agreements agreements not to not to not to not to use use use use them them them them but but but but taxation taxation taxation taxation is is is is kept kept kept kept as as as as security security security security

Danish Green Taxes 2009 in mio. Euro

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EEB – Green Budget Europe Conference Madrid 26.11.09

3 Nitrogen 4 PVC and Phtalates 1 Nikkel/cadmium Batteries 185 Piped Water 28 Sewage Water 23 Ressources 37 Waste Environmental Taxes

Danish Green Taxes 2009 in mio. Euro

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EEB – Green Budget Europe Conference Madrid 26.11.09

3 Nitrogen 4 PVC and Phtalates 1 Nikkel/cadmium Batteries 185 Piped Water 28 Sewage Water 23 Ressources 37 Waste Environmental Taxes Taxation around 10 % of Taxation around 10 % of Taxation around 10 % of Taxation around 10 % of consumer price but 100 % consumer price but 100 % consumer price but 100 % consumer price but 100 %

  • n water spill
  • n water spill
  • n water spill
  • n water spill

Danish Green Taxes 2009 in mio. Euro

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EEB – Green Budget Europe Conference Madrid 26.11.09

(Tax on value added by planning changed land use from agriculture to urban purposes) 1.351 Environmental Taxes all together 30 NOx 5 Mineral Phosphorus Environmental Taxes

Danish Green Taxes 2009 in mio. Euro

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The Danish Tax Shift in 1990’s

EEB – Green Budget Europe Conference Madrid 26.11.09

Left Axis – Labour Taxes in % of GDP Right Axis – Green Taxes in %% of GDP

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Lessons learned from the Tax Shift

  • Two sides of the tax shift need massive information
  • It’s easy to see the higher prices on energy, and very

difficult to see the reduction in labour taxation

  • Even though compensation for low income groups was

done, this was not understood by the public nor Press

  • The Social democratic Government did not inform very

much – and the Green tax shift was misused by the right wing parties in the election campaign in 2001

  • This lead to the present Tax Freeze in Denmark

EEB – Green Budget Europe Conference Madrid 26.11.09

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Transport - Nordic Car Registration Taxes

An An An An expensive expensive expensive expensive car car car car with with with with a short a short a short a short mileage mileage mileage mileage A A A A cheap cheap cheap cheap car car car car with with with with a a a a long long long long mileage mileage mileage mileage

Source: ”Taxing Transport and Climate Effect” The Danish Ecological Council and Norwegian and Swedish Societies for Nature Conservation, 2008

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High Registration Tax means Less Private Cars and more Company Cars

EEB – Green Budget Europe Conference Madrid 26.11.09

Source: ”Taxing Transport and Climate Effect” The Danish Ecological Council and Norwegian and Swedish Societies for Nature Conservation, 2008

Private and Company Cars per 1000 Inhabitants

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Taxes on Petrol and Diesel in EU

EEB – Green Budget Europe Conference Madrid 26.11.09

Source: ”Taxing Transport and Climate Effect” The Danish Ecological Council and Norwegian and Swedish Societies for Nature Conservation, 2008

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Less Cars in Denmark, but more Kilometres pr Car

EEB – Green Budget Europe Conference Madrid 26.11.09

Source: ”Taxing Transport and Climate Effect” The Danish Ecological Council and Norwegian and Swedish Societies for Nature Conservation, 2008

Average Driven Kilometres per Private Car

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Surprise: Age of Cars do not Depend on the Registration Tax

EEB – Green Budget Europe Conference Madrid 26.11.09

Source: ”Taxing Transport and Climate Effect” The Danish Ecological Council and Norwegian and Swedish Societies for Nature Conservation, 2008

Private Cars Average Age Share more than 10 years

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Some Proposals etc.

EEB – Green Budget Europe Conference Madrid 26.11.09

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Greening Private Property Taxation

  • Make Property Taxation Dependant of the Energy

Certificate of the Building

  • Gives economic incentives for the owner to renovate

the building to a better energy certificate

  • Gives energy certification more meaning

Proposal made by DEC, but supported widely by the Danish Construction Association, The Danish Building Research Institute

EEB – Green Budget Europe Conference Madrid 26.11.09

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Greening of Transport Taxation

  • Green the Registration Tax for new vehicles
  • Shift part of the registration tax to road pricing –

differentiating by the emissions of the car, congestion periods and geographical situation / reflecting the possibility for using public transport

  • Increase Taxation of Company Vehicles

EEB – Green Budget Europe Conference Madrid 26.11.09

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Energy Taxation due to Energy Price

  • Need a robust signal to use electricity, when the wind

blows – and not to use electricity when wind is still

  • Economic incentives are increased if energy taxation

(partly) follows the price of electricity

  • Will make energy savings more economically

beneficial during wintertime – and the use of surplus electricity for heat pumps with a storage more efficient

Supported by many organisations

EEB – Green Budget Europe Conference Madrid 26.11.09

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Carbon Trading versus Taxation

  • Setting a minimum price on EUA’s (Emission

allowances in the EU Carbon Trading System) will turn the ETS into a tax like system – when allowances are to be auctioned from 2013

This proposal is supported by rather many Danish organizations and Parliamentarians

EEB – Green Budget Europe Conference Madrid 26.11.09

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Green Tax Reforms have Double Dividend and Create Jobs

EEB – Green Budget Europe Conference Madrid 26.11.09

Source: The COMETR Project – Michael Skov Andersen, 2007

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www.ecocouncil.dk Thank you for your attention Questions please?

EEB – Green Budget Europe Conference Madrid 26.11.09