Are Green Taxes Pointless?

OVER the last two decades UK carbon emissions rather than falling have increased by 20 per cent, according to figures recently published by the Department for Environment, Food and Rural Affairs (DEFRA).

Carbon emissions associated with our spending on goods and services contribute to the national carbon footprint wherever these emissions arise in the world. Imports such as products made in China now account for almost half of the country’s carbon emissions.

The lack of progress on carbon reduction has led many to question the use of green taxes at a time when there is an urgent need to kick-start the economy. Critics believe green taxes have imposed unnecessary costs on UK industry – shifting emissions and jobs overseas.

Speaking at last year’s Conservative Party conference Chancellor George Osborne said: “We’re not going to save the planet by putting our country out of business”. So are environmental taxes pointless and are we wasting our time trying to cut the UK’s carbon footprint?

Taxation and death are two certainties in an increasingly uncertain world. Tax is a way we all contribute to our society yet the link between tax and enjoying the benefits of a good society seem to have been lost some time ago. Mark Twain once wrote: “The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin.”

Public resistance to taxation seems particularly strong when it comes to the use of green taxes whether this is a tax on carbon, fuel, bins or plastic bags. Green taxes have been used both to raise revenue and reduce environmental impacts.

In 2010 environmental taxes accounted for 8 per cent of total taxes and social contributions – equivalent to 3 per cent of the UK Gross Domestic Product. In total the Government received £42 billion from environmental taxes – £3 billion more than in 2009. The increase in tax revenue came mainly from fuel duty and the associated VAT on petrol and diesel.

Fuel duty was never intended as a green tax but has successfully discouraged car use. In last year’s budget the Chancellor cancelled the fuel duty escalator which each year added an extra penny on top of inflation. However, a planned rise in August will increase the price of petrol by 3p per litre. This has already resulted in pensioners, cabbies, van drivers and hauliers taking to the streets in protest.

Rising oil prices mean pump prices will reach a record high and has sparked fears that there could be a repeat of national fuel protests similar to those seen in September 2000. In an age of austerity fuel increases is seen as an additional pressure on hard-pressed motorists and businesses that rely on fuel.

Another green tax is the air passenger duty which has been used to discourage air travel. The duty will rise by 8 per cent this year, eventually rising to 50 per cent by 2016. Britain’s four largest airlines EasyJet, British Airways, Ryanair and Virgin Atlantic claim the increase would mean fewer visitors to the UK and will result in job losses in tourism, aviation and hospitality industries. The rise will price out families from flying with an average family of four facing a £500 levy to fly to Australia in four years’ time.

If the UK is to meet its target of an 80 per cent reduction in carbon emissions by 2050, major reforms of the electricity sector are needed. From April 2013 the conservative-led coalition government will introduce a ‘carbon floor’ price to increase the financial incentive to adopt low-carbon technologies. This tax aims to make the polluter pay a minimum amount for the right to pollute.

The floor price will start at around £16 per tonne of carbon dioxide and reach a target of £30 in 2020. The policy has been criticised as being ineffective and unfair as other EU companies will not face a minimum price for carbon.

The government admits around 40 per cent of the total costs of the floor price is likely to be borne by households – increasing the average household electricity bill by as much as 6 per cent.

Much of the opposition to green taxes is based on the impression that individuals and businesses are already being taxed too much. Unfortunately, there will always be opposition to green taxes until there is widespread recognition of the environmental and societal costs caused by our high consuming lifestyles.

Whether this is the health and environmental impacts of vehicle-related air and noise pollution or the greenhouse gas emissions resulting from air travel and the domestic energy sector. We have become so disconnected from the natural world that we do not see it has been fundamental to our way of life. Nor does our current economic system place enough value on the services the environment provides to society.

A 2009 report by the Green Fiscal Commission claims there is overwhelming evidence to suggest that environmental taxes are effective. Numerous examples of successful green taxes in other countries exist. These include the Danish energy taxes, the Swedish tax on nitrogen oxide emissions from energy plants, the German energy and transport taxes, the UK climate change levy and fuel duty escalator, the Finnish, Swedish and UK waste taxes, the London congestion charge and the Dutch waste water effluent charge.

The failure to cut national carbon emissions over the last two decades is being used to argue for green taxes to be diluted or scrapped altogether. Such an argument misses the point. What we need to address is our insatiable appetite for cheap throwaway products we find in pound shops up and down the country.

The surge in imported goods from developing countries that rely on dirty coal-fired power stations means we have successfully exported our pollution. It also means that we should accept responsibility for the emissions caused by the production of the goods that we buy.

If green taxes are to be made more publicly acceptable and effective they need to be straightforward so that taxpayers understand the behavioural change signal being sent. In order to build trust and acceptance of green taxes there needs to be greater use of ‘hypothecation’ of revenues.

This means earmarking tax revenues derived from a green tax for a specific environmentally friendly purpose. For example, the licence fund is used to finance the BBC. Therefore transport taxes could be used directly to improve public transport and infrastructure. Taxpayers will then clearly see the benefits of the green tax.

In an age of austerity it is easy to claim green taxes inhibit growth. However, such an argument does not recognise the economic, cultural and social benefits we gain from the multitude of resources and processes that are supplied by nature. Collectively, these benefits are known as ‘ecosystem services’ and include products such as clean drinking water and processes that result in the decomposition of wastes.

Green taxes are therefore important to ensure we protect our ‘life support system’. Rather than being seen as stealth taxes they should be seen as transparent incentives to change behaviour and to help us to make the transition to a low carbon and sustainable society on which our future prosperity depends.

© Gary Haq 2012

Selling Off Our Green Heritage

WHEN UK Premier Margaret Thatcher’s government privatised various public utilities in the 1980s she was criticised for ‘selling off the family silver’.
Now the ‘children of Thatcher’ want to sell off the family’s ‘green heritage’.

WHEN UK Premier Margaret Thatcher privatised various public utilities in the 1980s she was criticised for ‘selling off the family silver’.

Now the ‘children of Thatcher’ want to sell off the family’s ‘green heritage’.

As the UK Conservative-Liberal Democrat Coalition government proposes to ‘flog off the forests’ and dispose of 85 per cent of England’s public forest estate, they are receiving increasing opposition from cyclists, horse riders, ramblers to dog walkers and Oscar winning celebrities.

But will a government that wants to empower local people and communities, listen to what they have got to say?

The Forestry Commission currently manages 18 per cent of England’s woodlands. This includes a number of the most sensitive and protected wildlife habitats that form some of our greenest and most pleasant landscapes. The rest are privately owned and cover 931,000 hectares.

The Coalition government believes that other sectors of society might be better placed to own and manage the estate than the Forestry Commission, which has been in operation since 1919.

The public estate currently produces 70 per cent of England’s home grown softwood timber from its holding of 40 per cent of England’s conifer forests.

However, the Environment Minister, Caroline Spelman, argues that the Forestry Commission must be reformed to avoid conflict of interest as it is both a regulator and participant in the market.

By selling off its holdings the Forestry Commission can focus on its regulatory role by providing expertise on a range of tree-related matters.

On 27 January 2011 the Coalition government published a consultation document on the future of the forest estate in England.

In which it proposes a mix-model approach where charitable organisations, community groups and commercial operators buy or lease forests they would like to manage.

The government has divided English woodland into four categories based on their economic value and their social and environmental benefits. These range from ‘large’ and ‘small’ commercially viable forests and woodlands to ‘multi-purpose’ and ‘heritage’ forests.

The heritage forests such as the Forest of Dean and the New Forest will only be sold to charitable trusts.

The Head of the National Trust, Dame Fiona Reynolds, has described the government’s proposal to withdraw from the management and of England’s forests and ancient woodlands as a ‘watershed moment in the history of the nation’.

Another ‘watershed moment’ occurred with the enclosure of common land that took place in the eighteenth and nineteenth century.

This involved enclosing a field with a fence or hedge to prevent others from using it. The process allowed the supply of natural raw materials that was essential for the industrial revolution. Peasants were dislodged from their lands and forced to migrate to cities and work in factories.

This resulted in a fundamental shift in the economic relationship between people and their natural environment that dispossessed many while enriching a few, replacing collective rights with private property.

Forests are a large publicly owned asset. And some critics see the Coalition government’s decision to sell them off as being ideologically driven. Those who put their faith in the role of markets to bring social and environmental benefits endorse the selling off of nature.

They see that nature needs to be privately owned and turned into a commodity if its potential is to be realised and the common good is to be served. Yet this brings with it potential risks.

Campaigners against the Coalition government’s plans fear that those woodlands that are sold will not have the same guarantees of access as they have today.

They are concerned that the privatised forests will follow the fate of Rigg Wood – a 16 hectare wood in the Lake District which was sold in October last year. To the local residents dismay the new owner reduced access for visitors by shutting down the car park and dismantling the picnic area.

The forest sell off is part of David Cameron’s Big Society initiative to shift the balance of power from government to society. This will mean that financially strapped charities and communities groups will have to compete with commercial companies and wealthy inheritance tax dodgers, if they want to buy particular woodlands and forests to protect.

There is also no guarantee that a community-owned forest will have sufficient resources to maintain ownership over the long-term.

A Big Society requires politicians big enough to listen and respond when people tell them they have got it wrong. In the International Year of the Forests that celebrates ‘forests for people’ the Coalition government is in danger of preventing many from enjoying England’s most precious natural assets.

Nearly 500,000 people have signed the 38 Degree Save Our Forests petition. However, leading UK Environmentalist, Jonathon Porritt, has criticised Britain’s ten most powerful green groups for betraying the public and making themselves look irrelvant by not supporting the campaign to halt the sale of the England’s forests.

More recently, the Government has announced it would postpone the sell off of 15 per cent of forestland because of concerns over access rights.

However, the government claims that this will not affect its broader proposal to sell nationally owned woods, which is still the subject of public consultation.

Forests offer a vital connection with nature in an increasingly urbanised world. Even those who rarely venture into the woods take comfort in the fact that they exist and are accessible to all.

To sell of our green heritage is to deny future generations the freedom to roam in our woodlands and discover the wonders of nature.


In a statement to the Commons on 17 February 2011, Environment Secretary Caroline Spelman, who oversaw the controversial proposals, announced the u-turn, saying: “I am sorry, we got this one wrong.”

She said she took “full responsibility” for the climb-down, which was required after it became clear “the public and many MPs are not happy with the proposals”.

“If there is one clear message it is that people cherish their forests and woodlands and the benefits that they bring,” she told the House.

Lets see what happens next …

© Gary Haq 2011

Photo credits: Shutterstock

Every Hour is Earth Hour

N Saturday 28 March at 8.30 pm an estimated one billion people in 1,858 cities and towns in 81 countries will voluntarily switch of their lights for sixty minutes as part of WWF’s Earth Hour. This mass collective action is seen as sending a signal to politicians to take action on climate change. While such events create mass public awareness the message can quickly fade in the public consciousness.

earth-hourON Saturday 28 March at 8.30 pm an estimated one billion people in 1,858 cities and towns in 81 countries will voluntarily switch off their lights for sixty minutes as part of the Worldwide Fund for Nature’s (WWF) Earth Hour.

This mass collective action is seen as sending a signal to politicians to take action on climate change. While such events create mass public awareness the message can quickly fade in the public consciousness once the event has passed.

The 1985 Live Aid organized by Bob Geldof and Midge Ure to raise funds for famine relief in Ethiopia was the first event that galvanised the global public to take action. Since then we have seen Live 8 in 2006 held to raise awareness as part of the Make Poverty History Campaign. In 2007 we saw the Live Earth event which brought together a global audience to combat the climate crisis. We have also seen events organised by Nelson Mandela’s charity to raise awareness about AIDS. All these events do some good in raising awareness but whether awareness results in sustained action is a different story.

When it comes to the environment many individuals are green is some way whether motivated by saving money, reducing waste or saving the planet. The UK Department for Food and Rural Affairs (DEFRA) has developed a model that divides the public in the seven distinct groups based on a set of attitudes and beliefs towards the environment.

Around 7 million people are described as “Positive Greens” who are willing to do as much as they can to reduce their impact. Unfortunately, there is a similar number who are not bothered about the future of the planet as they are engrossed in their own lives. While there are about 5.7 million people who are concerned but cannot voluntarily move to greener behaviours with some help or incentive. The different types of individuals and their attitudes are described below:

Positive Greens (18%: 7.1 million)
I think it is important that I do as much as I can to limit my impact on the environment

Honestly disengaged (18%: 7.4 million)
May be there’ll be an environmental disaster, maybe not. Makes no difference to me, I’m just living life the way I want to.

Concerned Consumers (14%: 5.7 million)
I think I do more than a lot of people. Still going away is important; I’d find that that hard to give up. Well I wouldn’t, so carbon offsetting would make me feel better.

Cautious Participants (14%: 5.6 million)
I do a couple of things to help the environment. I’d really like to do more, well as long I saw others were.

Sideline Supporters (14%: 56 million)
I think climate change is a big problem for us. I know I don’t do much about how much water or electricity I use, and I forget to turn things off. I’d like to do a bit more.

Stalled Starters (10%: 4.1 million)
I don’t know much about climate change. I can’t afford a car so I use public transport. I’d like a car though.

Waste Watchers (12%: 5.2 million)
Waste not, want not, that’s important, you should live life thinking about what you are doing and using.

Time and money are issues they often come up when discussing greener lifestyles. If we did not have to work so much then perhaps we could devote more time to reducing our impact on the planet such as having an allotment, composting and doing more cycling and walking. Unfortunately many of us have to work to pay the bills.

The biggest outgoing is the rent or mortgage. If we had free accommodation or our mortgages were paid off then perhaps we could then work less and have more time to be greener. However, some would see these reasons as excuses. The DEFRA model shows the complexity of human behaviour and the different things which motivate us and which decide whether we are willing to be green or not.

Earth Hour is a major step in creating a blanket public awareness of the urgency and importance of the issue. However, once the razzmatazz is over then the real work begins. We need to communicate the message to individuals with different mindsets in a way convinces them to take action. That is why every hour is Earth hour.