6 Green Taxreform Germany

Green Tax and Budget Reform in Germany:Is the Double Dividend Working?: 

Green Tax and Budget Reform in Germany: Is the Double Dividend Working? Aneta Nikolova, ESDD, UNESCAP 14 December 2006, Bangkok

Background: 

Background Green tax and budget reform was introduced in 2001 by the Social Democratic Party (SDP); Nature - revenue-neutral green tax and budget reform that uses pollution/emission levels as a basis for taxes, while reducing income tax. Corporation taxes were lowered from 42% to 25 % and private incomes from 53% to 42 %

As much as we look: There‘s less and less oil in the tub: 

As much as we look: There‘s less and less oil in the tub

It’s not always easy being green and some people lose faith...: 

It’s not always easy being green and some people lose faith... ...but there‘s no reason to get cynical or pessimistic!

Main Principle or the Double Dividend of Green Tax: 

Main Principle or the Double Dividend of Green Tax energy and environmentally harmful transport are taxed and thus rendered more expensive, while revenues raised are used to make labour cheaper the taxes raised help protect the environment, decrease CO2 emissions, foster development and create new jobs

Most energy taxes were increased by high percentages: 

Most energy taxes were increased by high percentages 31% increase 49% increase 51% increase 200% increase

Benefits: 

Benefits A healthy climate instead of a climatic catastrophe The protection of scarce resources Less dependency on oil Competition in environmental technology More jobs

Policy Support: 

Policy Support In order to introduce the Green tax reforms, 2 law were changed and 2 more were passed The mineral oil tax law and the mineral oil tax regulation law were changed The electricity tax law and the electricity tax regulation laws were newly passed

What does Green Tax reform consist of?: 

What does Green Tax reform consist of? Reform of existing taxes in the interest of the environment Introduction of environmentally-oriented contributions and charges Subsidy policies that support sustainable development Sustainable and environmentally sound design of state fiscal activities, particularly state monies and state investment.

Our only problem is to step from the old, fossil bathtub into the nice new bathtub of solar energy... TRANSITION FOSSIL TO SOLAR : 

Our only problem is to step from the old, fossil bathtub into the nice new bathtub of solar energy... TRANSITION FOSSIL TO SOLAR Fossil energy bathtub Solar energy bathtub With ETR, ETS, and solar subsidies we’ll make the transit faster and smoother!

Climate change costs money INCREASE OF DAMAGES FROM NATURAL DISASTERS SINCE 1950s: 

Climate change costs money INCREASE OF DAMAGES FROM NATURAL DISASTERS SINCE 1950s Reference: Munich Re Increase > factor 10 Katrina costs: up to 200 Bn $!

Putting things in Perspective: Ecotaxes are still small: 

Putting things in Perspective: Ecotaxes are still small Japan 2003 Population: 125 million GDP: 3798 billion Euro Taxes 16% Social Security 11% of GDP Ecotaxes: 1,7% of GDP Germany 2003 Population: 82 million GDP: 2215 billion Euro Taxes 21% of GDP Social Security 18% of GDP Ecotaxes: over 10% of all taxes and contributions* About 4% of GDP* * Including road toll of 2005 and non-energy taxes like land tax, tobacco tax etc. 3.798 1025 27% 65 < 1,7% GDP Taxes + Ecotaxes Social Sec. 100% 100% 39% = 4% 2215 864 89*

First Results of Ecological Tax Reform POSITIVE EFFECTS ON NATURE, INNOVATION AND LABOUR: 

First Results of Ecological Tax Reform POSITIVE EFFECTS ON NATURE, INNOVATION AND LABOUR 1. Fuel consumption (>10%) CO2-emissions (2-2,5%) Overall tax burden Pension costs (5,6 bn) Costs for industry (1 bn) Empty truck travel Imported fossil fuels (14%) Car sharing Energy saving technologies Energy efficiency Gas-powered cars (x10) Bio-fuelled cars (x2) Job creation (≈ 250.000) Renewable energies Tax shift towards nature Less More

Conclusions and Lessons Learned: 

Conclusions and Lessons Learned Green tax increased the competitive edge of Germany on the European market Attracted more investments Stimulated innovation – hydrogen cars, improved public transport Crated new jobs Public support and pressure enhanced the process Future ecotax campaigns should not stress dangers, but innovation, benefits and future jobs

Green tax and budget reform : 

Green tax and budget reform