Environmental taxes
Presented by Maja Cederlund,
Statistics Sweden
However….
Written by Viveka Palm and Nancy
Steinbach, Statistics Sweden
together with Ute Roewer, Eurostat.
Structure today
- Why important?
- Environmental taxes in SEEA rev. - Purpose!
- Background/information
- Proposals (5 areas) including previous
background
- Summary of proposals!
Why is this so important?
-Very common & efficient policy tool
-As opposed to subsidies (later) we think
we talk about same thing
… not always the case!
THEREFORE:
 definitions very important!
 Internationally harmonised!
Environmental taxes in SEEA rev
● Why
having this presentation?
- Agreed to discuss further developments of SEEA
- Aim to raise the statistics to an agreed international
standard
● Current
status
-Chapter 5 – included in EPEA framework
-Chapter 6 – environmental taxes, broadly defined
paper  important suggestions in order to
propose a scope for revision of SEEA.
● This
Aim also to reduce current confusion.
EU outlook
Distributed in four categories
Proposals A-C – related to definition
● Energy
taxes
 SO2 taxes discussed in proposal D
● Pollution
taxes
 SO2 taxes discussed in proposal D
● Resource
taxes
 Resource rent taxes discussed in proposal E
●
Transport taxes
Proposal F – related to EPAE
Using Sweden as an example:
Energy tax
>Energy tax (total)
of which: fuel tax
electricity tax
>Other product taxes on electricity
of which: hyrdroelectic power tax
nuclear power tax 1
fees/tax for reduction and storage
>Carbon dioxide tax
Tax on certain substances
>Sulphur tax
>Tax on domestic air transport
>Tax on insecticides
>Tax on commercial fertilizers
>Tax on waste
>Environmental protection fee2
>Fee to the battery fund
Tax on transportation
>Vehicle tax
>Sales tax on motor vehicles
>Congestion tax
>Kilometre tax
>Fee to the vehicle scrap fund
Tax on natural resources
>Natural gravel tax
Per cent of GDP in Sweden
Per cent of total taxes in Sweden 3
Env. taxes in EU as per cent of total GDP in EU
Total
2004
63 946
34 948
17 880
17 069
2 486
1 863
645
26 490
1 416
131
61
303
729
108
84
8 338
8 062
276
202
202
2005
65 900
37 882
19 661
18 221
2 483
1 794
689
25 535
1 309
75
77
329
735
93
10 518
10 247
271
200
200
2006*
66 893
38 303
19 277
19 026
3 846
3 198
648
24 744
1 187
80
81
295
646
85
11 079
10 519
290
270
254
254
2,8%
8,7%
2,8%
8,5%
2,7%
8,3%
73 902
77 927
79 413
2007*
67 233
38 288
19 456
18 832
4 219
3 238
981
24 726
1 308
56
81
306
787
78
10 657
10 298
204
155
261
261
79 459
Definition tax
account to SNA – same tax definition, no
changes:
● Satellite
Taxes on products: §7.48 Taxes are compulsory, unrequited payments, in cash
or in kind, made by institutional units to government units. They are described as
unrequited because the government provides nothing in return to the individual
unit making the payment, although governments may use the funds raised in
taxes to provide goods or services to other units, either individually or collectively,
or to the community as a whole.
 One
● Fee
important issue though:
vs. Tax, difference not always clear!
- Describe borderline cases more clear
- May be cases where “we” can contribute
Proposal A1
● It
is suggested that the SEEA rev. will further develop
the paragraph clarifying the difference between a tax
and a fee in accordance with the final draft chapter 7
of the SNA rev both in general terms and for more
environmentally related items.
 Clarify differences, examples!
How to define an environmental tax
● OECD/EC
definition of Environmental tax, since 2001
”A tax whose tax base is a physical unit (or a proxy of it) of
something that has a proven, specific negative impact on the
environment.”
 Motive not of concern
 Used in SEEA today
● OECD/EEA
database definition, came later
- slightly modified
”This database defines environmentally related taxes as any compulsory,
unrequited payment to general government levied on tax-bases deemed to be of
particular environmental relevance. Taxes are unrequited in the sense that
benefits provided by government to taxpayers are not normally in proportion to
their payments.”
 The effect - more resource taxes
 “Softer” approach
 Not always complete coverage
Tax
bases:
OECD/EEA database on instruments used for
environmental policy and natural resources
management
www2.oecd.org/ecoinst/queries/index.htm
Proposal B1
● It
is suggested to use the definition of ”A tax whose
tax base is a physical unit (or a proxy of it) of
something that has a proven, specific negative impact
on the environment.” In accordance with Eurostat
2001 and SEEA 2003.
 OECD/EC definition!
Value added tax (VAT)
● VAT
excluded from environmental taxes today, why?
- Deductible for producers, not households, no
influence on the relative prices as other taxes on tax
bases do.
● However,
can be differentiated based on
environmental reasons, so may be interesting to
follow!
* Example Sweden: discussions
about reducing VAT for ecological food
Proposal C1 & C2
● It
is proposed to exclude calculations of VAT in the
concept of environmental taxes.
● It
is proposed that a discussion in the SEEA could
highlight the subsidy aspect of VAT.
Tax on sulphur
● Studies
shown difficulties separating sulphur tax from
carbon dioxide tax
● Also
the sulphur tax important from an energy
perspective
● Today
classified as Pollution tax
Proposal D1 & D2
●It
is proposed to include sulphur taxes as an energy
tax instead of a tax on pollution.
● It
is proposed to, as for carbon dioxide taxes, keep
the tax as a separate item under the category energy
taxes for facilitated analytical benefits.
 easy changes to make 
Energy tax
>Energy tax (total)
of which: fuel tax
electricity tax
>Other product taxes on electricity
of which: hyrdroelectic power tax
nuclear power tax 1
fees/tax for reduction and storage
>Carbon dioxide tax
Tax on certain substances
>Sulphur tax
>Tax on domestic air transport
>Tax on insecticides
>Tax on commercial fertilizers
>Tax on waste
>Environmental protection fee2
>Fee to the battery fund
Tax on transportation
>Vehicle tax
>Sales tax on motor vehicles
>Congestion tax
>Kilometre tax
>Fee to the vehicle scrap fund
Tax on natural resources
>Natural gravel tax
Per cent of GDP in Sweden
Per cent of total taxes in Sweden 3
Env. taxes in EU as per cent of total GDP in EU
Total
2004
63 946
34 948
17 880
17 069
2 486
1 863
645
26 490
1 416
131
61
303
729
108
84
8 338
8 062
276
202
202
2005
65 900
37 882
19 661
18 221
2 483
1 794
689
25 535
1 309
75
77
329
735
93
10 518
10 247
271
200
200
2006*
66 893
38 303
19 277
19 026
3 846
3 198
648
24 744
1 187
80
81
295
646
85
11 079
10 519
290
270
254
254
2,8%
8,7%
2,8%
8,5%
2,7%
8,3%
73 902
77 927
79 413
2007*
67 233
38 288
19 456
18 832
4 219
3 238
981
24 726
1 308
56
81
306
787
78
10 657
10 298
204
155
261
261
79 459
Taxes on oil and gas extraction
● In
2001, tax on oil and gas where excluded – why?
- Do not influence prices, as other environmental
taxes do
- Purpose to capture resource rent
- Tax base not physical unit but a result of output
value
● Treated
as an environmentally related tax in the
OECD/EEA database
Proposal E1 & E2 (in short)
●
It is suggested to exclude taxes on oil and gas
extraction if it is considered to be a resource rent.
(…..) If there is a country specific requirement to
highlight resource rents it should be kept separate to
the sum of environmental taxes.
● The
SEEA rev. should clarify better what type of
resource taxes can be included. It is important to
describe that each tax needs to be evaluated on its
own merits. (…..)
Taxes in the EPEA framework
● EPA
framework captures more than “Environmental tax”
1 Other taxes on production, levied on the
production of EP services
2 Taxes on products, levied on the output
of EP services
3 Specific taxes, i.e. earmarked for financing
EPEA
the prod. of EP services
4 Other environment-related taxes, i.e. on a physical
Env tax
env tax base, but not earmarked for EP activities
● Important that different approaches are kept close to
each other
Proposal F 1
●
It is proposed that the revised SEEA includes in the
same chapter the discussions on environmental
taxes and EPEA, for example some text / guidance is
needed to work out how both concepts can be
introduced in close connection with each other in a
consistent way.
Proposals in short
● A1 Further develop the paragraph clarifying the difference between a
tax and a fee
● B1 Use the definition from OECD/EC from 2001
● C1 Exclude calculations on VAT
● C2 Highlight the subsidy aspect of VAT in discussion
● D1 Include sulphur tax as Energy tax (now Pollution)
● D2 Keep sulphur tax separate
● E1 Exclude taxes on oil and gas extraction if considered to be a
resource rent. If include, keep separate
● E2 Clarify better which resource taxes to be included
● F1 Include discussion of environmental taxes in same chapter as
EPEA; with guidance
Definition E1 and E2
● E1. It is suggested to exclude taxes on oil and gas extraction if it is
considered to be a resource rent. As the tax base is not a physical unit
but a result of output value the payment in itself does not influence
prices. The payment can therefore not be considered an environmental
tax. If there is a country specific requirement to highlight resource rents
it should be kept separate to the sum of environmental taxes.
● E2. The SEEA rev. should clarify better what type of resource taxes can
be included. It is important to describe that each tax needs to be
evaluated on its own merits. One example is the Aggregates levy in the
UK. This is a resource tax on the commercial exploitation of rock, sand
and gravel. It is charged at the rate of £1.60 per tonne and applies to
anyone who is responsible for commercially exploiting aggregates in the
UK, such as quarrying operators, mobile crusher operators and
operators of dredgers. There is a similar tax in Sweden called Natural
gravel tax that is applied at a rate of 13 SEK per tonne gravel and has
been evaluated to belong to the area of natural resource taxes.