The central issue considered in this report is the extent to which a further extension of environmental taxation can contribute to building a sustainable economy. In the context of the present study, a sustainable economy is taken to mean that the risks associated with climate change and resource depletion are reduced to an acceptable level by 2050.
One strategy towards achieving this aim could comprise the following key elements:
The proposed ‘additional greening’ package comprises:
With the ambitious package of environmental taxes outlined, a 20% share of green tax revenue is feasible in the Netherlands, equivalent to 5% of the country’s Gross Domestic Product. This figure of 5% is in line with what international studies anticipate as being the fiscal limits of a green tax system. For this level of greening, Euro-pean coordination is not essential. In calculating the figure of 20% green tax revenue, due allowance has been made for the fact that reduced pollution will lead to declining tax revenues. Expectations are that this package will make a major contribution to achieving the government’s environmental and climate targets, particularly the latter. With this package, an additional greening of around € 8 billion can be achieved over and above existing green revenues of some € 19 billion. The share of green taxes would then rise from 14% today to around 20%. These revenues can be recycled in the form of lower taxes on corporate profits or labour, with the additional option of using some fraction to incentivise further energy-saving by selected target groups.