‘Green taxes’ could cut emissions by 30%

29 October 2009

A ‘polluter pays’ tax could reduce UK emissions by more than 30% by 2020 and create 455,000 new jobs, according to an influential think-tank.

A comprehensive report by the Green Fiscal Commission shows that higher ‘green’ taxes could, by themselves, enable the UK to meet its statutory carbon emission-reduction targets for 2020. The economic implications would be broadly neutral.

The tax would also provide a boost to the development of low carbon industries, thereby providing additional employment.

The report found that investing some of the revenues from increased green taxes in energy-efficient homes, cars and renewable energy schemes would reduce emissions further at effectively no cost.

It says the fairest way to implement green fiscal reform is through the reduction of other taxes, with special complementary provisions for low-income households, while increasing carbon and energy taxes. Raising further revenue from road transport is essential, even though it is already heavily taxed, the report says.

Carbon emissions from transport are still rising, and need to fall if the UK is to meet its carbon targets.’
A poll conducted for the commission showed clear public support for a green tax shift, with more than 50% supporting green taxes in principle.

Robert Napier, Green Fiscal Commission chairman, said: ‘This report adds the numbers to an issue which has been discussed in more general terms. It shows that green fiscal reform could help put the UK on a low-carbon track and from that, many positives will flow.’

• The case for green fiscal reform

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