Environmental Tax Reform in Lester Brown's Plan B 2.0

Scott Hollis
August/September 2006
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According to Lester Brown, president of the Earth Policy Institute, we should lower income tax rates and raise taxes on environmentally destructive activities such as burning fossil fuels, generating garbage and discharging toxic waste. This will incorporate the social costs of destructive products and services into the marketplace, thereby creating incentives for more reponsible environmental actions.

Known as 'environmental tax reform,' shifting taxes to reward environmentally responsible behavior (and punish those who act otherwise) is becoming popular in several European countries.

In Germany, a 1999 tax reform shifted taxes from labor to energy consumption. By 2001, this plan lowered fuel use by 5 percent and accelerated growth of renewable energy, creating 45,000 jobs by 2003 in the wind industry alone ? a number that is projected to rise to 103,000 by 2010. In Sweden, a tax restructuring plan will help the country become oil-free by 2025 by increasing taxes on cars and trucks, and electricity and fuel taxes.

Environmental tax shifting usually brings a double dividend. In reducing taxes on income ? in effect, taxes on labor ? labor becomes less costly, creating additional jobs while protecting the environment. Some 2,500 economists, including eight Nobel Prize winners in economics, have endorsed this concept. By incorporating the true cost of environmentally destructive practices into our tax code, we can create jobs while rewarding people and companies that behave responsibly.

To learn more about environmental tax reform, pick up a copy of Brown's book Plan B 2.0: Rescuing a Planet Under Stress and a Civilization in Trouble at MotherEarthShopping.com, or read an excerpt from the book online.

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