Where are the green taxes going?

In the UK, the Taxpayers’ Alliance has claimed that the government is raising billions of pounds more in green taxes than it needs to remove the UK’s “carbon footprint”.  In a report they say that emissions in 2005 had done damage worth an estimated £11.7 billion (covering the “social cost” of climate change to the world, such as weather changes and related disasters), but green taxes and charges in that year had been £21.9 billion.  It claims that  ministers are “cynically” raising revenue rather than using the money to improve the environment. The group says that, on average, UK households were “over-paying” £400 a year and fuel duty and vehicle excise duty were between 30 and 40 times higher than the level needed to cover estimates of the social cost of CO2 emissions. Naturally,  the Treasury said the pressure group’s claims were “ridiculous”.

While there may be an element of truth in these claims, they should be considered with caution.  There is not an entrenched principle of taxes in a particular sector paying for government expenditure in that sector, so their position needs to have a wider remit than focusing on green taxes only.  But more importantly, the costs of climate change are uncertain but probably more than we anticipate now.  In the UK, for example, the flooding this year was unexpected and extremely expensive.  This kind of natural disaster is likely to increase in frequency and severity.  It is pragmatic to overemphasise green initiatives until the culture of society puts nature first.

The group also fails to consider the buildup of pollution that occurred previously, in the 20th century.  There are still massive clean up costs from years of gratuitous polluting and those costs must be paid for.

While I would advocate a clearer disclosure of taxation and government expenditure, channelling resources in to greening our world (and education) is certainly the appropriate priority.


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