Study on environmental fiscal reform potential in 14 EU Member States : final report

This study, undertaken by Eunomia Research & Consulting (Eunomia) in conjunction with Professor Mikael Skou Andersen of Aarhus University and the Institute for European Environmental Policy (IEEP), has, as its central aim, to: "... provide empirical data or secondary sources on the potential economic and social benefits of environmental fiscal reform, to support the input in the European Semester process on environmental protection and resource efficiency". The specification elaborates on this as follows: "The task includes presenting data on the potential of revenues from environmental taxation and other indirect benefits such as job creation resulting from EFR in 14 selected countries, using the methodology the EEA has developed and which was also applied to the study published on 03.03.14 for 12 Member States". The following 14 Member States were included in this study: Bulgaria, Cyprus, Denmark, Finland, Germany, Greece, Latvia, Malta, Netherlands, Slovenia, Spain, Sweden, Ireland, United Kingdom. The approach taken in this study was to highlight the potential for revenue generation from environmental taxes using a methodology that Eunomia and Professor Mikael Skou Andersen developed as part of an earlier study published in March 2014. This study in turn built on work by the European Environment Agency between 2010 and 2013 on the potential for environmental fiscal reform in four EU Member States affected by the economic crisis. As with the last study for the European Commission, the intention of this study is to indicate where this potential may lie, and to demonstrate the order of magnitude of the revenues that could be derived from environmental taxes in each Member State if they are applied at rates proposed in this work. It should be mentioned that these rates do not constitute some 'upper bound' for each environmental tax, and that Member States may well seek to implement rates which exceed, or are lower than, those upon which the revenue calculations are based. The proposed timeline for implementation may also differ from that suggested here, which assumes a relatively swift application of the proposed taxes, whereas in practice, the final timeline for introduction of EFR will vary depending on various factors. Finally, whilst it is recognised that not all Member States are likely to be equally interested in all the suggested taxes, no attempt is made to understand which may be of greatest interest to a given Member States. The suggestions for reform set out in this study are meant to provide a stimulus for a general discussion on EFR and identify potential areas for exploration which could be taken forward where relevant.