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 - Green Detaxation English version
    
- Green Taxes & the "Detaxation effects of Green Lifestyle"

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Increasing worries around the potential effects of GHG (greenhouse gas) emissions on global climate change have brought the topic of environmental regulation at a peak in terms of interest. This is even more so when we consider the discussion in the media.
The so-called “green taxes" are one of the possible instruments for environmental regulation and have been implemented in various countries within the OECD (Organisation for Economic Co-operation and Development) and their share of tax revenue, in the last few years, has became significant.
Green taxes have some peculiarities compared to regular taxes that need to be underlined and developed because of the great potentiality that they have, especially on overcoming the negative aura that the term “tax” usually generates.
 In this direction here the proposal to underline the "detaxation effect" of green taxes on the development of Green Lifestyle

 Keywords:
 Double dividend, Greenhouse gas, Green taxes, Pigouvian taxes, Sustainability
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Pigouvian taxes
Green taxes are one of the best applications of Pigouvian taxes and are aimed at resolving a failure of the market that is not capable alone to reach the optimal social level of usage of the environment. Particularly those environmental goods that are in nature public goods cannot be well managed under classic market rules that consider them as zero-cost resources with infinite stock. There is therefore the need for public intervention to correct these false price signals and internalize the costs of the damages and, ideally, also the value of the environmental services used.
The objective of a Pigouvian tax is to limit externality-generating activities up to the point at which the damage cost of an extra unit of activity is equal to the cost of abating an additional unit of activity; in other words, up to the point that is cost justifiable.
In the case where the environmental good considered is a public good, it is crucial to take into consideration both the social benefits and costs of the preservation of the environment and of the human activities that use such goods, with a Samuelsonian approach. Further complications are added if issues of intergenerational justice are included.
One major issue that complicates the implementation of green taxes is the question on how to calculate in monetary terms the marginal damages. To this end, methods of environmental evaluation (Revealed & Stated preference methods), have arisen, but most often they cannot value the total economic value of the environmental goods and there is still not a complete agreement on their validity. In addition, as the environment is a complex and very interrelated system, it is not always possible to predict the full effects and the consequences of human activities, and consequently, to value them without a great deal of uncertainty.
In the literature, taxes as a regulatory instrument for the environment are described as having the advantage of providing the flexibility of response needed to achieve the least-cost abatement outcome without heavy informational requirements. They also create continuing incentives for consumers and producers to change their behaviour and stimulate innovation and pollution reduction over time.
On the other hand taxes have as a main drawback that, even if we assume that the optimal level of tax can be found, they only cap the expenditure for achieving a given standard of environmental protection and not the quantity of polluting emissions.
Nevertheless, one of the main advantages of taxes compared to all other regulation instruments, with the exception of auctioned tradable emission permits, is that they produce extra revenue for the state.

Double Dividend
Literature shows that environmental taxation can have multiple and complex effects over and above the ones on the environment. It can, in fact, affect employment, national fiscal systems and possibly even long term innovation and competitiveness.
These effects are due to the fact that green taxes, in addition to their environmental objective of reducing pollution emissions, produce extra revenue for the state that can then be spent to achieve other, non necessarily environmental, objectives.
Particularly interesting are the cases when the effects of green taxes are achieved in a revenue-neutral way, that is without increasing global tax pressure. This can be obtained by reducing other pre-existing taxes and, consequently, producing macroeconomic benefits, due to the distortionary effects that non-pigouvian taxes can have on the market. This combination of environmental and economic benefits is usually referred to as the ``double dividend''. Literature focuses on two main ``second dividends'': employment and gross-welfare dividends. The first refers to an increase in employment consequent to the reduction of labour taxes, the second to the diminished distortions on consumer choice that can be achieved by lowering sales and other taxes.
Clearly this concept has a strong appeal as it jointly tackles two crucial policy-goals: better quality environment and economic objectives that are usually part of a trade-off; however more detailed studies have highlighted how the situation is more complex and that there are many complicated issues that can undermine these effects.
However, real-world implementation of green taxes is quite complex: imperfect competition of markets, cross boundary effects and multiple economic and political objectives are only a few examples of the reasons why green taxes in practice are designed differently from textbook theory. In most cases second-best policies are applied and taxes do not target the externality directly but a proxy, that may be imperfectly correlated but generates lower administrative costs or distributional effects.


Ethics and utopia of green taxes
Although the effectiveness of the double dividend is uncertain and discussed in the literature, it is important to underline the potential of the concept of ``tax shifting''.
Some economists believe in a progressive shift from taxation of ``goods'', like production and labour, to the taxation of ``bads'', like pollution or environmental damage, in order to favour and support ``virtuous behaviour''.
This is intended to be a strategy for the future that can move towards a more advanced management of sustainable economics.  A first step towards a new taxation system that focuses not only on the amount of profits gained, but also on the way in which these profits are achieved, socially and environmentally.
An important extra potential of green taxes that is sometimes neglected in the green taxation literature, is the appeal that an advanced "eco-taxation'' can have on the public, if it is understood that green taxes can be managed in a ``fiscally neutral'' way and linked to the firm's ethic behaviour. Especially in the case for Italy, in order to capture public favour, it would be highly recommendable to stress that the ``green'' revenue will be used to reach precise and verifiable objectives and not just add to general state revenue, in order for it not to be viewed as disappearing.
This of public acceptance is an extra dimension that is important to consider as global environmental problems increasingly need the active participation of the public to be tackled. It is therefore important that governments take advantage of the increasing public interest on environmental issues.
Some survey studies show how citizens would be willing to give up fiscal neutrality and be willing to pay a certain amount of taxes to reduce the environmental impacts of their actions. It is therefore important not to forget the appeal that a fiscally neutral eco-tax reform can have on public acceptance and the cultural changes that could arise as a consequence.

In this direction the proposal to underline the "detaxation effect" of green taxes on the development of Green Lifestyle in order to take into account all the multiple effects involved in the Environmental Knowledge Management (EKM), especially for managing the public acceptance and cooperation.


continua ....

ECR       

 

- The Interviews
    To go deeper  with experts

 

 

 

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 - Green Detaxation English version

- The Interviews
   To go deeper  with experts

 

The questions:
-  The current state of analysis on the Green taxes: from different point of wiew
-  Method of investigation of the multiple & systemic effects of Green taxes
-  "Green detaxation" and the shaping processes of green lifestyle
-   Learning processes & the Knowledge Society: the case of environment
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   under construction .......



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In particular, Goulder (1995) distinguishes two levels of double dividend: ``weak'' when the welfare improvements of lowering other taxes are simply compared to lump-sum transfers to citizens and ``strong'' when it is claimed that green taxes can increase economic efficiency through the increase in real income and consumption. The main uncertainties, in the literature, regard the strong double dividend hypothesis and are strongly related to the revenue-optimality of current tax-system or to the amount of voluntary/involuntary unemployment, to tax-burden shifting possibilities, to capital mobility and to the ``tax-interaction effect'' . Carraro, Galeotti and Gallo (1994) give some empirical evidence on the fact that the employment double dividend could even reduce the environmental effects (first dividend) of the tax.
 

 

 

 

 

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