Take ITR’s survey here on tax and the environment. Share your views on the robustness of existing environmental tax policy, the responsibility for addressing environmental damage and what needs to happen next. Your answers will be kept anonymous.
Environmental tax policy has become increasingly significant in the past few years. Individuals, industry, national governments and international organisations have started to tackle the issue and are figuring out the role tax has to play.
Pressure on lawmakers and a recognition of pollution has translated to stronger stances on protecting the environment, following repeated failures to acknowledge the issue on a national and international level.
The EU is looking to broaden its carbon-pricing scheme, the largest in the world. China is in the process of introducing a new system. US presidential candidate Joe Biden, who supported carbon prices as vice-president in the Obama administration, will do so again in his upcoming campaign.
A push for environmental taxation has even been seen in the US with discussions surrounding the Green New Deal and the Baker-Shultz proposal. This was fortified by US companies publicly supporting a version of a carbon tax.
The stakes are now higher than ever. The pandemic has derailed the global economy and risks forcing countries to focus solely on managing the immediate crisis and the aftermath. However, COVID-19 provides a unique opportunity and may accelerate the environmental policy trend.
The circumstances are unique. Energy prices have plummeted because of slipping demand, making it easier to remove fossil fuel subsidies and introduce taxes. Interest rates around the world are low and will likely remain low in the long-term, reducing the cost of investment, including greener projects. Additionally, money to address budget holes will have to come from somewhere. Why not make it green?
As with any large shift, there are setbacks and costs with moving away from the status quo. Environmental concerns feed into slowing corporate investment in new technologies despite countries introducing tax incentives to cash in on the digital economy growth. This needs to be reconciled.
Many governments will include green measures in their recovery plans and international organisations see the road to recovery as a chance to rebuild a greener community. An overhaul of tax policies will be necessary and businesses could reduce their carbon footprint under a circular economy that supports an environmental strategy.
The task may seem insurmountable, but we have no choice but to try. Tax could be a key tool in addressing this global issue.
As part of the autumn theme of tax and the environment, ITR hopes to find out how the tax community feels about environmental taxation at a turning point for both the global tax landscape and the environment.
Take our survey before it closes and we will share the results in our autumn issue of the ITR magazine and online. Click here to take the survey.
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