The Green Tax Man: Good or Bad?

By many standards the UK Government is among the eco leaders of the world, with a clear commitment to make significant cuts in greenhouse emissions, numerous tax incentives for green behaviour, and longer term ambitions to reduce CO2 output by up to 80%.

However, actions speak louder than words, particularly the words of politicians.

When the British Government announced their most recent budget earlier this year, there was much applause from green groups after chancellor Alistair Darling announced almost draconian increases in taxation on gas guzzling cars.

But how effective are these taxes? Do we have a clear set of policies that are making a real difference, or is there some truth in accusations that governments are using a green agenda to raise additional tax revenue?

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Early projections suggest that the latter may be true, with the UK treasury estimating that new green motoring taxes will provide an additional £4 billion ($7.9 billion) in tax revenues, but reduce vehicle emissions by only 1% (0.06% of the total CO2 emissions in the UK).

The new motor taxes have obviously been widely criticized, with the shadow Treasury minister describing it as “This is a massive tax hike which will have virtually no impact on the environment,” adding that “Despite their claims, the Government don’t expect this move to change behaviour at all - it is just another eco-stealth tax of the worst kind.”

To which the British government has feebly responded “The Government is committed to protecting the environment and tackling climate change. Part of this commitment involves promoting sustainable environmental improvements through tax and other economic instruments, and incentivising the development and uptake of lower emissions vehicles.”

Many fear that these are merely warm intentions, and not concrete commitments. Considering that, for example, current investment in energy research is approximately one tenth of the amount spent on space research, and that UK CO2 emissions are still rising after over a decade of pseudo green government action, it would appear that a new approach is needed.

Until then it will be hard to argue with the sentiment that for many governments green = more tax.

Photo courtesy of Flickr.

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