EU to raise environmental taxes across member states

THE EUROPEAN UNION could raise €35bn (£28.7bn) by 2016 through an increase in air and water pollution taxes, a report has suggested.

A study by the European Commission has claimed that the potential for greener taxes moves levies away from labour taxes onto environmental behaviour, Tax-News reports.

On balance, these changes would be considered to have a positive impact on employment, the study said. 

The commission estimates that the cost to individual member states would range from 1% of GDP to 2.5% depending on the member state.

The study will feed into the European Semester, established in 2010 to improve the coordination of policies across EU countries. The commission made clear that it intends to “green” the Semester, and hopes to ensure that policies are sustainable from an environmental, economic and social point standpoint. 

The EU’s environment commissioner, Janez Potocnik, said: “Environmental fiscal reforms have the potential to almost double the revenues they currently bring to national treasuries, with benefits for our environment as well as scope for cutting taxes on employment or cutting deficit.

“That’s a powerful argument for changing the status quo.”

Related reading