Published: Jan 09, 2012
Last modified: Jan 09, 2012 - European governments
could simultaneously reduce income tax,
increase innovation and cut pollution by
introducing well-targeted environmental
taxes and recycling the revenues back into
the economy. This was one of the findings
from a pair of reports on environmental
tax reform (ETR) published today by the
European Environment Agency (EEA).
Environmental tax reform
is defined as 'reform of the national tax
system where there is a shift of the burden
of taxes, for example from labour to environmentally
damaging activities, such as unsustainable
resource use or pollution'.
There are at least four possible types of
effects of ETR. The first effect is to make
various goods or activities more expensive,
while the second effect comes from the direct
or indirect distribution of this extra revenue.
Thirdly, job creation and eco-innovation
may be another result of this process. And
lastly, effective ETR will also result in
environmental benefits, for example by reducing
pollution.
Environmental taxation also has an important
role to play in spurring innovation, according
to a broad range of studies. By increasing
tax on pollution and other environmentally-damaging
activities, governments can use the extra
funds to provide incentives for innovation,
such as developing renewable energy. For
advanced economies like the EU, such schemes
also create new technologies which can be
exported globally, the reports say.
The reports also look at ETR in practice
across Europe. Analysis of policies in Germany
and the Netherlands showed that ETR and
other environmental policy instruments have
broadly positive effects in increasing innovation.
The wider economic effects of ETR have also
been analysed in Germany, where environmental
taxation cut pension contributions and created
an estimated 250 000 jobs.
One of the challenges of ETR is ensuring
the costs and benefits are appropriately
distributed across society, and do not negatively
impact the poorest people. Instruments also
need to balance the right mix of environmental
and economic incentives. Ultimately, ETR
mechanisms can only be implemented if they
are acceptable to the public and policy-makers.
Modelling the impact of environmental tax
reform
The EEA calculated the impact of a tax on
energy and other resources, with the revenues
used to cut social security payments and
income taxes. The model indicated that this
fiscal reform would result in financial
benefits for almost all socio-economic groups.
However, in a few countries the poorest
people could see negative effects, as these
people spend a higher proportion of their
income on energy.
Increasing the cost
of emitting carbon could also have a negative
effect on the poorest groups, according
to a Germany-based modelling study. However,
the scenario shows that the worst-hit parts
of society could lose just 1 % of their
disposable income in 2020, so it would be
relatively simple and affordable to compensate
the affected groups via targeted benefit
transfers.
Furthermore, the reduction in social security
payments means labour costs decrease, boosting
employment – the model suggests that increasing
the price of emitting one tonne of carbon
dioxide to €68 by 2020 could create 152
000 additional jobs in Germany.
The modelling exercise
also analysed the effects of applying ETR
to meet the EU target of reducing greenhouse
gases by 20 % by 2020. This scenario looked
at the effect of taxing emissions, with
the revenues used to support innovation
and reduce income tax and social security
costs. The model showed that the policies
would increase employment by more than 1
million jobs, with only a small (0.04 %)
cost to GDP to achieve the 20% GHG reduction
target at EU level.
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Greenland’s Health Ministry
signs cooperation agreement with EEA
Published: Jan 13, 2012
Last modified: Feb 07, 2012 - The Ministry
of Health in Greenland has signed an agreement
with the European Environment Agency (EEA).
The two organisations committed to exchange
personnel, and share knowledge, data and
other expertise on environment-related health
issues.
The aim is to improve
the sharing of data and information. Both
parties hope that this will contribute to
the quality and timeliness of assessments
of environmental impacts on human health,
both for the European region as a whole
and the Arctic region in particular.
In the agreement, signatories note that
“Europe leaves a footprint in the Greenlandic
and Arctic environment with known, as well
as suspected, effects on human health”.
Pollutants can be transported across the
Atlantic by ocean currents and atmospheric
deposition, and may accumulate in certain
foods in Greenland.
Another important environmental issue in
Greenland is waste management, because waste
is often not separated or stored properly
so there is a risk it will leach into the
surrounding environment. This problem is
exacerbated by the long distances between
settlements and waste treatment plants.
The EEA is working with the Greenlandic
government to improve the situation.
In the agreement between the EEA and the
Health Ministry, initial priorities for
collaboration include establishing a liaison
agreement on exchange of personnel. In addition,
both parties hope to exchange data, knowledge
and information on environment-related health
issues. There is particular interest in
the effects of chemicals and hazardous substances,
the human consequences of waste management,
and health impacts of climate change.
Several areas of EEA work are of immediate
relevance for the Arctic, such as health
impacts of climate change, reducing burdens
and health impacts of hazardous chemicals
in children, and reducing health inequalities.
The agreement also includes a commitment
to share knowledge to improve existing environmental
assessments.
The EEA and the Arctic
The EEA is an independent EU Agency that
has 32 member countries, including five
Arctic states, namely Norway, Iceland, Denmark,
Finland and Sweden. In addition six further
EEA member countries are permanent observers
in the Arctic Council. Moreover, the EEA
and Greenland have been cooperating since
2010.
The EEA is active in environment and health
initiatives in Europe, with a dedicated
part of its Eionet network looking at Environment
and Health. It also cooperates with other
relevant partners, including the European
Commission, other EU agencies, the World
Health Organization (WHO), non-governmental
organisations and many other international
bodies. In the framework of the WHO-led
pan-European Environment and Health process,
the EEA is committed to contributing to
the implementation of the Declaration of
the Fifth Ministerial Conference (Parma,
2010).
