Greening the tax system
Effects and assessments of options for the 2009 Tax Plan
At the request of the Dutch Environment ministry (VROM) CE Delft has assessed the environmental effectiveness of 15 fiscal measures included in the government’s 2009 Tax Plan. The measures relate to traffic and transport (e.g. differentiation of Vehicle Purchase Tax according to absolute CO2 emissions), household energy consumption and industry (e.g. an increase in energy tax) and the built environment (e.g. an income tax deduction indexed to energy performance of the home). Besides their environmental effectiveness, these ‘tax-greening’ measures were also assessed with respect to competition effects for Dutch industry, political support, impact on spending power and burden-sharing, coherence within the specific context of environmental policy, fiscal compatibility and enforceability. The results of the study are to be used in preparing the present government’s ‘second round’ of tax-greening measures.
The overall package will lead to cuts in CO2 emissions of around 0.74 Mt in 2010 and 1.5 Mt in 2020. These figures should be seen as the lower bound of actual effects, as some of these proved unquantifiable. The overall impact of the tax-greening package thus represents some 4 to 7% of the government’s climate aspirations for 2020 with respect to the built environment and transport sectors.