Environmental Tax Reform (ETR): A Policy for Green Growth

Many people have serious concerns about the environment and wonder whether solving environmental problems is compatible with continuing economic growth. This book provides an in-depth exploration of a proposed reform to the national tax system, whereby the burden of taxes is shifted from conventional taxes, such as those levied on labour and capital, to taxes on environmentally related activities, that involve resource use, particularly energy, or environmental pollution. There is some experience of such 'environmental tax reform' (ETR) in Europe, and the book briefly reviews this before considering how a more ambitious ETR in Europe could substantially reduce greenhouse gas emissions and material flows through the economy, while stimulating innovation and investment in the key 'clean and green' sectors of the economy which seem likely to play an increasing part in the creation of prosperity in Europe and elsewhere in the future. Case studies of renewable energy, construction, fuel-efficient vehicles, and waste management in Germany show how these fast-growing sectors are making an increasing contribution to employment, output, and exports in the German economy, while improving the environment. The book explores the implications of introducing it on a much wider scale throughout the European Union. A unique modelling exercise, using two macroeconomic models, delivers varied and complementary insights into the economic and environmental results of a large-scale ETR in Europe, and its effects on and implications for the rest of the world. The modelling suggests that such a policy has a key role in the achievement of Europe's targets to reduce its greenhouse gas emissions, and, if implemented with cooperative policy in other countries, could significantly reduce global emissions. The book is essential and hopeful reading for anyone who has wondered how, with today's intensifying environmental challenges, economic growth could become more environmentally sustainable. Contributors to this volume - Paolo Agnolucci, Birkbeck College, University of London Terry Barker, University of Cambridge Jennifer Barton, Cambridge Econometrics (CE) Daniel Blobel, Ecologic Institute, Berlin Martin Bruckner, Vienna University of Technology Thomas Drosdowski, Institute for Economic Structures Research, Osnabruck Paul Ekins, UCL Energy Institute, University College London Holger Gerdes, Ecologic Institute, Berlin Stefan Giljum, Sustainable Europe Research Institute (SERI) Friedrich Hinterberger, Wuppertal Institute for Climate, Environment and Energy Martin Janicke, Wuppertal Institute for Climate, Environment and Energy Ariane Jungnitz, HKM, Duisburg Jaroslav Klusak, University of Economics, Prague Daniel Lee, Cambridge Econometrics (CE) Christian Lutz, GWS, Institute for Economic Structures Research, Osnabruck Bernd Meyer, University of Osnabruck Hector Pollitt, Cambridge Econometrics (CE) Christine Polzin, Sustainable Resource Use Petr Sauer, University of Economics, Prague Stefan Speck, Kommunalkredit Public Consulting, Austria Philip Summerton, Cambridge Econometrics (CE) Ondrej Vojacek, University of Economics, Prague Kirsten Wiebe, Institute for Economic Structures Research, Osnabruck Marc Ingo Wolter, Roland Zieschank, Freie Universitat Berlin Jarmila Zimmermannova, Ministry of the Environment of the Czech Republic, Department of Sustainable Energy and Transportation