Around €35billion (£29billion) of additional revenue could be raised by introducing or extending environmental taxes across 12 European Union Member States, new research suggests.
The EU study identified the potential for environmental fiscal reform (EFR) in Austria, Hungary, Italy, Belgium, Croatia, Lithuania, Czech Republic, Poland, Estonia, Romania, France and Slovakia.
According to the research, additional tax revenues could rise to €101billion by 2025 across the 12 countries if a range of tax recommendations are implemented.
Recommendations include new taxes, or changes to existing taxes, covering energy, transport, air pollution, landfill, incineration, packaging, plastic bags, abstraction of water, discharge of waste waters, fertilisers, pesticides and aggregates.
In addition, the research suggests there is scope for revenue savings from removing environmentally harmful subsidies.
The study was carried out under the European Semester process, which seeks to ensure economic policies are sustainable, not only economically and socially, but also environmentally.
According to Eunomia Research and Consulting, which carried out the study, the Annual Growth Survey, which kicked off the Semester process, indicated that “recovery in Europe does not mean getting back to ‘business-as-usual'”, and that tax should be designed to be more “growth-friendly”.
For instance, by reducing taxes on labour and raising more revenue through taxes which help combat environmental degradation and improve resource efficiency, it said.
“The measures we have suggested could raise more than EUR €100billion in real terms by the next decade. This could contribute to fiscal consolidation or be used as part of a tax shift,” said Eunomia’s chairman, and the project director, Dominic Hogg.
“In either case, this can reduce the extent to which countries resort to taxes which are more detrimental to economic growth and employment, and deliver environmental benefits. We hope that Member States will consider these suggested changes as part of their reforms arising out of the European Semester process.”
The study is expected to feed into the development of country specific recommendations to be proposed by the Commission as part of the Semester process.