(5 December 2012) On the sidelines of the UN Climate Change Conference in Doha, representatives from business, UN, government and other stakeholder groups engaged in discussions on the role of fiscal instruments in environmental policy-making with the objective of identifying principles for a framework for environmental taxation and environment-related tax measures that promote green, inclusive economies.
The official side event on this matter, which took place today, was organized by the International Chamber of Commerce (ICC) in partnership with the UN Economic Commission for Latin America and the Caribbean (ECLAC), the German government and the non-governmental organization Responding to Climate Change (RTCC). The event provided a platform to introduce and examine the different economic instruments that can be employed in environmental policy-making, including fiscal and market-based mechanisms. Participants agreed that policy strategies should enable business to move forward on sustainability solutions.
"Whether taxes, subsidies or other policy instruments are employed, they need to be based on sound cost-benefit analysis, transparent and economically, environmentally and socially effective," said Kersten-Karl Barth, Sustainability Director at Siemens AG, and Chair of the ICC Commission on Environment and Energy, setting the stage in his opening speech.
Luis Miguel Galindo, Chief of the Climate Change Unit of ECLAC, said: "For markets to work for sustainable and low-emissions development, prices are misaligned and fiscal policy can help align them properly by pricing externalities. However, while the concepts may be clear and understood, the required changes in fiscal policy still need to be developed."
"It is important to consider that the sensitivity to prices on the demand for gasoline is smaller in Latin American than in develop countries because the non-existence of adequate substitutes to the private transport, therefore, it is important that, together, with the price signals to develop a consistent set of regulations, an appropriate public transport and a low carbon supporting infrastructure", he added.
Anna Theeuwes, Shell Tax Policy Expert with ICC's taxation commission, commented: "The design parameters for environmental taxation should provide a framework that underpins environmental policies in the most economically efficient manner as to affect behaviour for specific environmental goals in the most economically efficient manner. Such a framework has to be designed within and be consistent with the overall context of the total fiscal framework. Otherwise, environmental taxes may increase the economic costs of taxation while providing only a limited environmental benefit."
Participants recommended overarching principles that should be followed in designing a framework for environmental taxation and specific environment-related taxation measures. These included:
The panelists were able to draw from a variety of resources including the ICC policy paper Environmental taxation principles - fiscal instruments and environmental policy-making, the ICC Green Economy Roadmap - a guide for business, policy-makers and society and the ECLAC studies Economics of Climate Change in Latin America and the Caribbean Summary 2009 and Economics of Climate Change in Latin America and the Caribbean Summary 2010.
These lay the ground for a common understanding for the challenges but also the opportunities of crafting sound fiscal mechanisms, and create a set of proposals designed to spark dialogue between business, government and inter-governmental system.
For more information, please contact:
International Chamber of Commerce (ICC)
E-Mail: gsh@iccwbo.org, Telephone: +49 (0)30 200 7363 40
ECLAC Public Information and Web Services Section
E-mail: prensa@cepal.org, Telephone: +56 2 2210 2040
Follow us on: Twitter, Facebook, Flickr and YouTube
Responding to Climate Change
E-mail: ek@rtcc.org, Telephone: +44 (0)20 7799 2222
