Green Taxation

Abstract

Eco taxes; Environmental taxes; Green taxes; Pigouvian taxes Definition Green Taxation, also known as Environmental Taxation, involves the use of taxation to promote more responsible environmentally taxpayers' behavior, through tax penalties, in order to punish the polluting behavior, or tax benefits to encourage good behaviors. Definitions of this concept can also be found outside the scientific context, for instance, according to the Carbon Brief Staff (2013) this concept ". . .is commonly used to refer to a package of government measures intended to encourage expansion of low-carbon power, subsidise home insulation and tackle fuel poverty." Additionally, the United Kingdom Government (2012) states that "Environmental taxes are defined as those which meet all of the following three principles: (i) the tax is explicitly linked to the government's environmental objectives; (ii) the primary objective of the tax is to encourage environmentally positive behaviour change; (iii) the tax is structured in relation to environmental objectives, for example: the more polluting the behaviour, the greater the tax levied."Moreover, the concept of green taxation is inextricably linked with the concept of Green Tax Reform. This type of tax reform seeks to introduce environmental taxes, thereby replacing much of the traditional taxation on companies (income and capital), labor income, and contributions to social security systems, in order to reduce unemployment levels (Álvarez et al. 1998;Alves and Palma 2004). Thus, the Green Tax Reforms presuppose the obtaining of a double gain, denominated by effect of the "double dividend": the environmental gain and the reduction of unemployment, by tax relief on labor.