The green tax is one of the tools used in directing policies to preserve the environment and achieve sustainable development, but it faces some obstacles in practical application. In order to confront these obstacles, they must be correctly diagnosed to find ways to address
In practice there is no one green tax but a whole bulk of different taxes which are called green taxes, environmental taxes or eco-taxes. In view of the tax theory eco-taxes are indirect taxes laid on emissions, products or raw material, where taxes on emissions are the most prominent example (Pigouvian taxation). Their specific purpose is not the tax revenue but the internalization of negative external effects (in theory also called public bads). As consequence behavioral adaptations on side of the taxpayers should reduce the extent of negative external effects.
An encompassing tax on CO2 emissions is the carbon tax levied on the production of goods and services; beside that several indirect taxes on energy inputs and consumption exist (gasoline tax, heating oil and gas tax, tax on electricity) which traditionally have been used as revenue sources for the public budgets but should also have behavioral steering effects (like in case of taxes on demerit goods like alcoholic beverages, tobacco and other drugs), that means decreasing production and/or consumption of goods and services with negative external effects.
The actually occurring steering effects of eco-taxes represent the extent of behavioral adaptation, depending on the consumers preferences due to consumers sovereignty which determine the production structure of private goods (utility maximizing hypothesis), the producers preferences due to the producers sovereignty (profit maximizing hypothesis) and the mechanism of related prices which all are expressed within the elasticities of demand and supply as well as the substitution elasticities between all relevant goods and services ((PDF) Pros and Cons of Eco-Taxation. Available from: https://www.researchgate.net/publication/320058466_Pros_and_Cons_of_Eco-Taxation [accessed Jan 29 2022]).
In general, it can be said that behavioral adjustments can only be expected if eco-taxes are clearly noticeable and also have sufficiently high tax rates. This might be in conflict with other political targets (e.g. with the fight against poverty), the acceptance of the taxpayers and - if not accepted - with unintended side effects, e.g. switch into the shadow economy or illegal activities. For more pros and cons see the paper mentioned above.
Thank you very much, Dr. Hans Georg, for the answer and the clarification
Research topics that keep pace with reality and need extensive research
In addition to Hans-Georg Petersen's excellent answer, you might also consider that public goods and services (infrastructure) create enormous windfall profits for owners of prime sites. Returning publicly-created land values to the communities that create them can help communities more sustainable both environmentally and fiscally. For more info, see "Land value return" and building a more equitable economy - Shareable
Green Accounting exist to minimize the environmental effect because of carbon. Green tax are come from this carbon emission or green house gas emission. So green accounting is a tool to disgnosing this problem
Regulations and regulations related to green accounting must be clearly implemented by the government, so that the development of the SDGs can be achieved, through sustainable environmental economic development.
The largest detraction to green taxation is the numerous and large information costs in setting and changing the tax, which are as follows: It also must try to equalize the MAC, which requires even more administrative costs.
Thank you Dr. Gaurav Bhambri can you explain in more details and attach a search if possible?
The greatest obstacle is on reimbursing the cost incurred on setting the tax such as costs in levying and the expenses on corresponding staffs working on data collection for setting the tax.