Blueprint for a Better Planet
(Page 7 of 10)
When it comes to reflecting the value of nature, ecologists
can calculate the values of services a forest provides in a
given location. Once these are determined, they can be
incorporated into the price of trees as a "stumpage tax"
similar to the sort Bulgaria and Lithuania have adopted.
Anyone wishing to cut a tree in these countries has to pay
a tax equal to the value of the services that tree
provides. Because forest services may be worth several
times as much as the timber, this tax reduces tree cutting
and encourages wood and paper recycling. These sorts of
taxes create a more truthful market.
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Tax shifting also helps countries gain the lead in
producing new energy-efficient technologies. For example,
the Danish government's tax incentives for wind-generated
electricity have made Denmark, a country of only 5 million
people, the world's leading manufacturer of wind turbines.
Environmental tax shifting reduces taxes on wages and
encourages investment in activities like wind power and
recycling, thus simultaneously boosting employment and
lessening environmental destruction.
SHIFTING SUBSIDIES
Each year the world's taxpayers underwrite $700 billion in
subsidies for environmentally destructive activities, such
as burning fossil fuels, overpumping aquifers,
clear-cutting forests and overfishing. A 1997 book-length
Earth Council study entitled Subsidizing Unsustainable
Development observes, "There is something unbelievable
about the world spending hundreds of billions of dollars
annually to subsidize its own destruction."
Iran provides a classic example of extreme subsidies: The
country prices oil for internal use at one-tenth the world
price, strongly encouraging the consumption of gasoline.
The World Bank reports that if this $3.6 billion annual
subsidy were phased out, it would reduce Iran's carbon
emissions by a staggering 49 percent. It also would
strengthen the economy by freeing up pub lic revenues for
investment in the country's economic and social
development. But Iran is not alone. The Bank reports that
removing energy subsidies would reduce carbon emissions in
Venezuela by 26 percent, in Russia by 17 percent, in India
by 14 percent and in Indonesia by 11 percent.
Some countries already are eliminating or reducing these
climate-disrupting subsidies. Belgium, France and Japan
have phased out all subsidies for coal. Germany reduced its
coal subsidies from $5.4 billion in 1989 to $2.8 billion in
2002, meanwhile lowering its coal use by 46 percent.
Germans plan to phase these subsidies out entirely by 2010.
China cut its coal subsidy from $750 million in 1993 to
$240 million in 1995. More recently, it has imposed a tax
on high-sulfur coals. Together, these two measures helped
to reduce coal use in China by 5 percent between 1997 and
2001, when the economy was expanding by one-third.
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