 Paul Ekins, professor of energy and environment policy at the University College London |
Staff reporter
Environmental tax reform, also known as a ``green tax,'' is crucial in efforts to solve the world's environmental problems, particularly climate change.
Paul Ekins, a professor of energy and environment policy at University College London, said environmental tax reform shifts taxes from income and social security to carbon use and pollution.
``What happens is people who use less energy and carbon end up better off because their income and labor taxes have gone down, and people in businesses that use more carbon, they end up paying more... This is a policy mechanism that enables the government to develop the new industries of the future at effectively no cost,'' Ekins told The Korea Times.
Based on past experiences of six European countries, including the United Kingdom, these green taxes have a good economic effect and negligible impact on gross domestic product. In 2001, the U.K. government imposed taxes on the business use of energy, while reducing social security payments by companies. In Sweden, there is a carbon tax of 100 euros per ton of carbon.
However, an obstacle would be the general public's dislike of taxes. ``People like doing the things you're taxing, like driving, flying and using energy at homes. All those things will become expensive because of the green tax shift, so you have to persuade people that it is necessary to use less carbon and fossil fuels and to use it more efficiently,'' Ekins said.
Green growth as a new paradigm for economic and social development was also one of the key issues discussed during the East Asia Climate Forum 2010 at The Shilla Hotel, Seoul, Wednesday.
Mario Amano, deputy secretary-general of the Organization of Economic Cooperation and Development (OECD), said governments need to introduce a mix of green growth policies such as market-based standards and incentives for research and development.
``The OECD experience shows that getting the price right is the most cost-effective way to promote green growth. Taxes and charges should be central to the strategy... The use of price-based tools is spreading in OECD, but it is not enough. Water is undervalued, and polluters are not yet made to bear the social costs,'' Amano said, in a speech at the forum.
However, Amano cited obstacles to green growth, such as environmentally harmful subsidies, green protectionism and trade barriers. ``We need to remove subsidies for fossil fuels... The International Energy Agency estimates that subsidies for fossil fuels in emerging economies amounted to $557 billion in 2008,'' he said.
The Korean government's foresight in pursuing a long-term green growth strategy was also praised by participants at the forum.
``Korea was absolutely way ahead on top in terms of the proportion of the fiscal packages that went to green technology. That was incredibly smart: are you going to spend the money in the industries of the past or pushing for the industries of the future? ... Korea did the right thing, and now everyone is working to catch up,'' Ekins said.
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