Budgetary Policies for Environmental Improvement
International Studies in Environmental Policy Making series
Edited by J. Peter Clinch, Kai Schlegelmilch, Rolf-Ulrich Sprenger and Ursula Triebswetter
Chapter 6: A review of environmentally damaging tax concessions in Germany
Clinch 02 chap 5 15/11/01 1:30 pm Page 107 6. A review of environmentally damaging tax concessions in Germany Ursula Triebswetter 1. BACKGROUND AND POLICY CONTEXT Although an EU-wide CO2/energy tax has virtually failed, currently both the European Commission and the German government are concerned with advancing the idea of ecological tax reform by other means. In June 1996, for example, at a conference organized by the Directorates General for the Environment, the Single Market and Taxation entitled ‘Economic Incentives and Disincentives for Environmental Protection’, it was evident that the strategy of the European Commission had changed to the extent that the major reform of the energy tax was no longer being pursued but instead efforts were directed at examining and if necessary reforming the entire tax and charges system with regard to its ecological impact (Ökologische Briefe, 1996). This policy reflects the intention of the Fifth Environmental Action Programme to integrate environmental considerations into fiscal policy needs (European Commission, 1995). Strong emphasis is put on the removal of ecologically harmful tax concessions in the individual member states. The most prominent example in Europe and the world is the mineral oil tax exemption for kerosene. This means a considerable subsidy for atmospheric pollution from aircraft and at the same time a substantial income loss for governments. A variety of legal exceptions exist on the national level that encourage negative environmental effects throughout the economy. A study on the phenomenon of environmentally damaging tax concessions has been undertaken for the...
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