Table of Contents

Environmental Taxation and Green Fiscal Reform

Environmental Taxation and Green Fiscal Reform

Theory and Impact

Critical Issues in Environmental Taxation series

Edited by Larry Kreiser, Soocheol Lee, Kazuhiro Ueta, Janet E. Milne and Hope Ashiabor

Against a backdrop of intense political interest it is more important than ever to explore the role of fiscal policy in achieving environmental sustainability. Environmental Taxation and Green Fiscal Reform skilfully explores the various ranges of environmental and energy policies needed for an environmentally sustainable future.

Chapter 12: Environmental taxes – definitional analysis: behavioural change or revenue raising

Sally-Ann Joseph

Subjects: economics and finance, environmental economics, public finance, environment, energy economics, energy policy and regulation, environmental law, law - academic, environmental law, tax law and fiscal policy, politics and public policy, environmental politics and policy


When the Organisation for Economic Cooperation and Development (OECD) first reviewed the use of environmental economic instruments in 1987, it identified about 150 instruments. The database now contains approximately 375 such taxes with an additional 250 environmentally related fees and charges. These can be levied on the input to, the production of, or the output of environmental services. In fact, anything affecting the environment can be considered, such as congestion charges, waste levies, park entrance fees and landfill taxes. In other words, environmental taxes can take on a multiplicity of forms and perform divergent functions. This chapter first discusses the purpose of environmental taxation, from its traditional roots as a motivator for behavioural change to its more modern recognition as a revenue raising tool. The definitions and characterisations of environmental taxes are then canvassed, commencing with a discussion of the international definition, followed by an analysis of how environmental taxes are defined, and hence classified, in Australia and the United Kingdom. This has implications for what is considered to be an ‘environmental tax’. The scope of this discussion, and hence of this chapter, is restricted to the characterisation of environmental taxation. It is not the author’s intention to critique the political and fiscal budgetary implications.

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