Governments could make better use of environmental taxes to discourage polluting activities and boost innovative ‘green technologies.’
“To achieve a greener future we need new technologies that can lower the cost of saving the planet,” says OECD Secretary-General Angel Gurría. “Shifting part of the tax burden onto pollution makes it more attractive to develop and adopt these clean technologies and promotes green growth.”
OECD and many other governments already apply a range of taxes to energy, air and water pollutants and waste. Environmental taxes, along with tradable permit systems, are the most cost-effective and efficient environmental policy tool available. Citizens and industry react to green taxes by changing their behaviour, especially if government gives a strong signal that they intend to maintain tax rates and the price of carbon at high levels in the long-term.
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