Renewed discussion of the beneficial effects taxation can have on the environment is very much to be welcomed. It is good to be reminded, as speakers at an Earthwatch conference in Dublin argued yesterday, that many such instruments of policy can make a genuine contribution to sustainable development and be revenue neutral, in that they do not necessarily add, to the sum total of existing taxation.
It was even better to learn from the Minister for the Environment, Mr Howlin, that the Government hopes to introduce some such measures of "green taxation" in the January budget, following consideration by an inter departmental committee. This means that they have really arrived and are being taken seriously, after many years during which they have received minimal official attention.
One must presume that the increasing evidence of degradation in urban and rural areas as a result of environmentally damaging industrial and agricultural practices and the tremendous accumulation of the wasteful products of consumer society have finally brought the need for change home to departmental bureaucracies. As for politicians, it is interesting and instructive to note how more readily they are prepared to take such ideas on board after the Green Party's successes in local, national and European elections.
Very often, as one speaker pointed out to the conference, it makes much better sense to use taxation as a means of changing environmental behaviour rather than setting up yet another layer of regulatory mechanisms and officialdoms. Various taxes on domestic or vehicular fuels come into this category. The experience of the shift from leaded to unleaded petrol is a good case in point. The huge increase in the number of motor vehicles on Irish roads, snarling up the streets of the capital and other cities, could be so targeted. The Minister suggested, with good reason, that road tax could be calculated on fuel consumption rather than engine capacity, which would be a useful means of bringing down unnecessary mileage.
The principle that the polluter should pay is capable of great enlargement in local as well as national taxation policy. It can be a flexible instrument, since much can be done at national level that does not prejudice international competitiveness. This is often used as an excuse within the European Union for not proceeding, for example with a carbon tax, on the grounds that it can only fairly be applied if its reach is global. All too often the effect of this argument is to delay any action whatsoever, to the great benefit of vested interests of one kind or another. It is as well to be reminded that most fiscal policy within the EU remains firmly embedded at the level of the nation state, from which it is most unlikely to be shifted.
Reported hostility to more environmental specific taxation by the Department of Finance because of fears over competitiveness or adherence to the EMU convergence criteria may be just traditional thinking dressed up in modern garb. It should be resisted in, turn by a Government that should be keen to attract ecologically aware voters in the next election.