Transcript The Ecological Tax Reform in Germany

The Consolidation of Governance and Entrepreneurship
in the Czech Republic and the EU
Prague, 1 November 2002
The Ecological Tax Reform in Germanyan environmental policy innovation in
international comparison
Lutz Mez
Environmental Policy Research Unit
Free University of Berlin
ETR – Content
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ETR Characteristics
Denmark
Netherlands
Finland
Sweden
Germany
EFR
ETR - Characteristics
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Target: improvement of the environment
Taxing of rare resources
Release of the factor labour
Polluter shall pay social costs
Consumer and industry shall get a
feeling for the effects of their behaviour
on the environment
ETR in Denmark I
• Energy taxes since 1977
• CO2 component introduced 1992
• Left-center government tried to solve
economic problems by „green policy“
• ETR in force since 1 January 1994
• Five year commitment for tax increases
– longer than legislature periode
ETR in Denmark II
• Environmental effect review of all new laws,
ordinances etc.
• Structural change of the tax revenue
• Burden in first place for private households
• Tax package for industry - introduced in the
2nd stage 1996
• Whitsun Package 1998 – increase of energy
taxes in the year 1998-2002
ETR in Denmark III
• Refinement of the ecotax instrument by
instrumental mix
• Optimisation of instrumental effects
• Bundling with voluntary agreements
• Diffusion of best appliances
• 2001 Action plan for reducin CO2 emissions in
the Danish transport sector
• Over 6% of total tax revenue and around 3%
of GDP
RANGE OF INSTRUMENTS IN THE INNOVATION PROCESS
(Case: Energy Efficient Refridgerators)
DANISH PLAN “ENERGY 2000“ (1990) / CLIMATE POLICY
CO2 / Energy Tax
Environmental Tax
Reform
Labelling
Energy
Consumption
Public Awarens
Campaigns
Part Exchange Scheme
DIFFUSION
R&DFunding
R&DNetworks
Maximum
Consumption
Standards
INNOVATION
ETR in Denmark IV
Instititutional innovations
• Enlargement of the environmental and
the energy agency
• Appointment of Danish Sustainability
Council
• Connection with energy action plan
“Energy 21”
• New liberal/conservative government
cancelled this!
Ecotaxes in The Netherlands
1988 Introduction of environmental tax on
energy consumption
1992 Energy /CO2 tax on energy and
CO2 content of fossil energy
(temporary spare out of small and
large consumers)
1998 raising tex-free limits and doubling the tax
rates until 2001 – about 14% of total tax
revenue
Ecotaxes in Finland
1990 CO2 tax as component of energy
consumtion tax (1. country in the
world!)
1997 New CO2 / electricity tax (due to EU
accession)
1999 0.3% of GDP or around 0.5% of
total tax revenue
Ecotaxes in Sweden
1991 Tax reform
Reduction of income tax, increase
of indirect taxes and additional
CO2, NOx and SO2 taxes
1998 Energy/CO2 tax shall rise faster
as inflation rate
2000 Special tax on nuclear plants came
into force
Ecotaxes in Norway
1991 Introduction of CO2tax
1998 2nd stage, inclusion of industry
(100 NOK/t CO2 = 2.5 bn. NOK)
1999 0.2% of total tax revenue
ETR in Germany I
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Phase-in in three steps - 1. stage
Rise the price of energy by taxes
Reduction of social security contributions
Article law (Electricity law (StromStG),
Review of Mineral oil tax law)
• 1999 - ETR in five steps until 2003
• Efficient power plants are exempt from ecoand mineral oil tax
ETR in Germany II
• Social security contributions - before
ETR 42.3% - will be reduced to around
40.5% by the end of 2003
• ETR is basically revenue-neutral
• € 735 million for a market incentive
programme for RES
Ecotax in Germany
Mineral oil /
electricity
Increase
January 1, 2002
Tax rate
Share of ecotax
Gasoline
3.07 Cent/l
62.38 Cent/l
12.26 Cent/l
Diesel
3.07 Cent/l
43.97 Cent/l
12.26 Cent/l
Light fuel oil
0
6.14 Cent/l
2.05 Cent/l
Natural gas
0
0.35 Cent/kWh
0.16 Cent/kWh
LNG
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3.83 Cent/kg
1.28 Cent/kg
0.26 Cent/kWh
1.79 Cent/kWh
1.79 Cent/kWh
Electricity
Environmental Effects of ETR
• Petrol consumption decreased by 12% (20011999)
• Diesel consumtion decreased by 2%
• Fuel sales declined by total of 5%
• Car-pool agencies reported a 25% growth
• Development of one-litre car has progressed
• Number of rail passenger increased by 2% in
2000
General environmental effects
• Increasing energy taxes provide a market
incentive to save energy. Thus energy saving
is promoted instead of energy consumption
subsidised
• Insurance companies ask for higher ecotaxes
in the sense of precautionary climate
protection
• Tax concessions for local public transport, rail
traffic, gas-powered vehicles and sulphur-free
fuels
Effectiveness of ETR
Instrumentation
• Economic
stimulation
• Policy mix
• Strategic approach
• Process support
Policy Style
• Dialog orientation
• Calculability
• Demanding goals
• Flexibility
• Management
orientation
Actor’s Constellation
• Stakeholder influence
• Regulator/target group
interconnection
• Target group network
• Policy integration
Ecological Fiscal Reform
• Priority for the removal of subventions and tax
reductions harmful to the environment
• Market incentive programme for RES will be
increased: 2004: € 200 Mio., 2005: € 220
Mio., 2006: € 230 Mio.
• Tax reductions for industry are reduced
• Car taxes will be reformed in a revenue
neutral way (CO2 as basis)
• Ecotax on natural gas will be adapted
according to the energy content of fuels
That‘s all, folks!
Lutz Mez
Environmental Policy Research Unit
Free University of Berlin
[email protected]