According to Lester Brown, president of the
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
responsible 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
To learn more about environmental tax reform, pick up a copy of
Plan B 2.0: Rescuing a Planet Under Stress and a Civilization in Trouble, or read an
excerpt from the book online.