Subsidies and tax losses from climate schemes

Energy transition will have an increasing impact on public finances, both in terms of spending on climate policy and on revenues from energy and environmental taxes (green taxes). As climate policy becomes more effective and lower demand for fossil fuels mean that climate targets are closer to being achieved, the tax revenue the government misses out on will continue to grow.

The purpose of this study is as follows:

  1. Determine whether the government has calculated the tax losses due to green policies and/or is aware of the overall size of these losses.
  2. Examine whether and how this loss plays a role in promoting the climate solution (or whether tax the loss is included as a incentive cost?).
  3. Examine whether there are other transitions that are comparable to electric driving in terms of the size of the tax loss (and incentive).
  4. In other words: have alternatives to cover these tax losses been examined with regard to other green policies?

The questions are answered by means of an analysis of five measures (in the form of index cards) in which we look at the size of the loss of tax revenue, what calculations underlie this, whether the tax loss is included in the decision-making process and how this tax loss can be offset.