Peace and Environment News* September 1997
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Peace and Environment News * September 1997 |
by Frank de Jong
It's easy to blame consumers and manufacturers for our current world of environmentally unfriendly living. But most of the responsibility for ecological destruction lies with the present system of subsidies and taxes.
A greener tax system would make environmentally friendly shopping less expensive as well as ensure that manufacturers earn more by producing green products. Green taxes would help consumers save money when they buy the greenest product available. Eliminating subsidies to ecologically destructive technologies would encourage manufacturers to choose green manufacturing processes.
Unfortunately, governments continue to resist green taxes, probably because they find it hard to stand up to moneyed interests who continue to profit from destroying ecosystems. Voters, too, rarely pressure their elected officials to consider green alternatives.
Whatever the reasons, it's high time that green taxes were phased in. Revenue raised through environmental levies would offset corporate and income taxes, which could be phased out.
How it works
Green levies can be applied most effectively at two points of taxation—the consumer, and resources. Consumer taxes show up at the checkout counter, while resource taxes are applied directly on commodities like trees, air, minerals, metals, aggregates and land. Green taxes can also be imposed on waste disposal and smokestack and tailpipe emissions.
Checkout counter green taxes encourage shoppers to choose green products over grey products—those that are not environmentally friendly. In Ontario, while most goods and services carry a 15 percent tax rate (7 percent PST and 8 percent GST), governments tax certain products selectively, like alcohol and cigarettes, to discourage their consumption. A green consumption tax—or rather, tax break—would mean eco-friendly items like bicycles, hand tools, gardening equipment, composters, insulation, double windows, compact fluorescent light bulbs, energy-efficient appliances, solar hot water systems, photovoltaic cells and lead-free paints would be tax-free. To compensate for lost government revenue, taxes could be raised on ecologically destructive products like cars, sea doos, power mowers, pesticides, and single use packaging.
Eliminating the 15 percent tax on green products would help level the playing field. Eco-destructive products are cheaper now because their manufacturers have managed to download most of their long-term costs. So the publicly-funded health care system pays for sickness caused by toxic byproducts, and cities pay for waste dumped in landfills.
Resource taxes are applied on the resource before it enters into the manufacturing process. Presently, resources are tax free, and the tax burden falls on labour in the form of income tax. Green taxes would shift the burden from labour onto industry, which is depleting scarce resources.
Greening the economy
Can society manage to turn green without the help of governments? To a point, yes. The 30-year-old green movement is driven by thousands of people and businesses who feel the ecological and social imperatives are too strong to sit around and wait for government action.
Even the business community has made good progress despite a tax system that doesn't recognize the economic, social and environmental savings green businesses offer. There are now investment opportunities in ethical funds and clean environment funds, and if you search hard, you can invest directly in green businesses. Or, if you identify a niche market, you can start your own green business.
And, without prodding from government, several big businesses in Canada and around the world have signed onto a "business-and-life" philosophy from Sweden called The Natural Step. This movement encourages business and government to base their decisions on a small number of basic principles that define a sustainable society.
Green taxes in practice
Some governments have begun to use green taxes. Norway pledged to cut carbon dioxide emissions to 1990 levels by the year 2000, and to that end they have imposed a hefty $50 per ton tax on CO2 emissions. The Australian government is considering imposing a carbon tax at $1.25 per tonne of carbon dioxide emissions, which is expected to raise between $300 million and $400 million annually. Several European countries are starting to introduce taxes on short-life products, one-way disposable packaging, and on particularly hazardous products such as batteries.
The UK's first green tax, the Landfill Tax, introduced in October 1996, aims to cut waste, to encourage reuse or recycling, and to boost employment. The Landfill Tax is expected to raise £450,000 a year, through a levy of £7 a tonne on waste. Denmark has charged for the disposal of non-hazardous waste since 1987. Their tax nearly doubles the cost of waste disposal, and the revenues from it go into general revenue.
In April 1991, Baden-Wuerttemberg in southwest Germany introduced a charge on toxic waste to tackle the increasing amounts of this waste. The tax rates were doubled in 1993. The amount of toxic waste generated has dropped by half over three years. At the same time, revenues have increased almost threefold.
In 1991, Sweden introduced charges on the sales of lead batteries over 3 kg and small batteries containing over 0.025 percent mercury or cadmium. Revenues from the charges are used to cover the costs of separate collection and disposal, and to provide information.
A growing body of evidence suggests that green taxes encourage conservation, reduce pollution and raise revenue.
What steps should governments take? First, they should stop paying polluters by phasing out direct and hidden subsidies to ecologically destructive technologies. Second, governments should make polluters pay by slowly shifting taxes away from incomes to emissions, garbage and natural resources. Third, governments should encourage clean technologies and green lifestyles by levying environmental taxes on environmentally unfriendly practices.
Frank de Jong is leader of the Green Party of Ontario. He can be reached at Box 35101, Ottawa ON K1Z 1A2, FDeJong@greenparty.on.ca. www.greenparty.on.ca.
Converted January 28, 2000 - Lg
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