Green taxation is one of the tools of fiscal policy that works as a double-edged sword, the first of which is to achieve revenue for the state and the second is to reduce environmental pollution
Good Question
In various countries, a number of taxes are already there, so imposing new taxes particularly in the era of reduced business activity due to COVID-19, should be avoided. As far as your question regarding Transport Sector or Industrial Sector is concerned, the Govt. may impose it on Industrial Sector, but it should be imposed very carefully, and big corporate houses should be taxed on a higher side, but it should be as low as possible for the MSME Sector.
One is led to answer that it all depends on the type of national economy that we are talking about....there is quite a difference between many economies of the world in terms of what each has by way of the sizes of their transport and industrial sectors. In countries which have accumulated over time good regular (more than annual!) assessments and calculations of what is the extent of their throwing up into the country's air and environments the various quantums of pollutants that are being thrown into that country's air and environments, then such statistics will quickly indicate to us which are the larger "pollutants"....whether it is industry that is spewing out into the air the polluting carbons, or whether it is the transport sector.
So in reality it would be ideal to tax heavily both, but with a bias towards taxing more heavily the more polluting. As we always say....data, data, data....information, information, information....these are always the elements which should be at the basis of any econoimiuc decision such as this....
Dr. John Consiglio
Faculty of Economics, Management & Acountancy,
The University of Malta
This might be a false choice. What are your criteria for "best?"
Pollution is often an "externality." In other words, the producer of pollution is not paying for the costs that this waste product is imposing on others. Any set of taxes (or fees) that make producers pay the full cost of cleaning or neutralizing the waste they produce will reduce pollution and enhance equity. And this is true in both the transportation sector and the industrial sector.
An externality that is often overlooked is associated with land value. Land value is predominantly created by a community. In other words, a community invests in infrastructure and this infrastructure makes individual land parcels good places to live or work. However, private landowners appropriate the lion's share of this publicly-created land value. This is the fuel for land speculation - a parasitic activity that creates nothing of value but which inflates the price of land, particularly at prime locations (near existing infrastructure). This drives development to cheaper, but more remote sites (urban sprawl). Land speculation is a key factor in promoting urban sprawl which exacerbates pollution and climate change.
Returning publicly-created land value to the public sector that creates it and recycling the revenue for the public goods and services that created it can accomplish several important objectives. First, it provides justifiable revenue. Infrastructure beneficiaries pay for their benefits in proportion to the benefits received. Second, it discourages land speculation and encourages infill development - which reduces urban sprawl. Thus it helps reduce pollution and climate change.
Land value return can be achieved by a tax shift -- reducing the property tax applied to privately-created building values while increasing the tax applied to publicly-created land values. At no cost to a community and with no loss in revenue, this tax shift makes both buildings and land more affordable. This enhances economic vitality while reducing energy consumption and pollution.
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مساء الخير،
لعل أفضل طريقة لفرض طريقة لفرض رسوم وضرائب خضراء في القطاع الصناعي وقطاع النقل، هي اعفاء الشركات والأفراد المستخدمة لطاقات نظيفة، وزيادة الرسوم على الطاقات غير النظيفة.
I totally agree with Prof. Rybeck's analysis. It is undeniable that a substantial contribution to pollution is made by building and construction (often so-called "development", or should we call them uglifiers!???) operators. Some (including economists and political decision-makers) are not perhaps giving this topic sufficient care and attention. I fully subscribe that the best way towards getting humans to act the way that they should is via their pockets, for which read taxes. There is far too much God-given land and nature which is being taken away from several countries' citizens and this only in the interests of developers and capitalist project promoters. In every country the relationship between built and unbuilt land is going to the worse, and this in a context where decisionmakers are not realising that when nature loses out at the behest of capitalist venturing then, inevitably, it is also us the human species that in either the short term or the longer term will also inevitably follow as losers.
Dr. John Consiglio
FAculty of Economics, Management & Accountancy,
The University of Malta.
El sector industrial porque es la que mas contamina a través de sus procesos de transformación de materias primas.
I wonder how correct is Professor Perez Pena's point that it is the industrial sector that contaminates most....I have some doubts about this, and feel that it all depends on which country's statistics we would be looking at.
The problem of course also is that different countries have different ways of collecting and collating their domestic statistics about pollution...who contributes, and when, and to what extent.....so I'm afraid that the choice is not at all as simple as we may be tempted to make it.
Dr. John Consiglio
Faculty of Economics, Management & Accountancy,
The University of Malta
If you are talking about taxing the transport sector, the green taxes are most appropriate because they tend to kill two birds at once.
There is evidence to show that underpricing roadway use contributes to excessive driving and pollution. But, Is "cordon pricing" a green tax applied to transportation? It depends on land use controls.
In the short term, charging vehicles for entering the central business district (CBD) will reduce the number of vehicles entering the CBD. However, if land controls are loose, over the long term some might avoid the cordon price by moving residences and businesses out of the CBD. Thus, if cordon pricing encourages people and businesses to move away from the urban center (urban sprawl), it will exacerbate energy consumption and pollution.
For this reason, I recommend distance-based roadway charges in lieu of cordon pricing. Distance-based charges encourage residents and businesses to locate closer to their daily destinations in order to minimize fees. Thus, distance-based charges encourage more compact development that minimizes single-occupant vehicular traffic while facilitating transit, biking, walking and other forms of shared transportation.