Environmental taxes overblown

Great expectations of the amount of revenue that could be raised from green taxes have come crashing down, according to a report carried out by the Institute of Fiscal Studies.

Green taxes are likely to only raise 1% of GDP, the study for the Mirrlees review has found. The review is skeptical that environmental taxes will bring any benefits to the economy, the Financial Times reported.

Robert Chote, director of the IFS, said: 'Enthusiasts often overestimate the available revenues and claim a 'double dividend' of improved environmental and economic performance'.

Among the various other taxes in aid of the environment are higher fuel taxes and carbon trading, which limits the amount of C02 industries can emit into the environment.

Carbon Trading could make as much as £13bn based on the recommended £80 per tonne of C02 by the stern review. Currently the price is set in Europe as £15 per tonne but the European Union want that to double before the US and other nations are due to join in 2020.

Further reading:

Internal audit and the environment: how green is your audit?

Institute of Fiscal Studies