GREEN TAX

Green Tax-Meaning

Green tax refers to taxes intended to promote ecologically sustainable activities via economic incentives. such a policy can complement or avert the need for regulatory approaches.

1. Carbon Tax

Carbon tax is an environmental tax that is levied on the carbon content of fuel. Carbon atoms are present in every fossil fuels and are released as carbon dioxide (CO2)when they are burnt.

Effects

• Carbon tax is implemented in proportion of the carbon content included in the fuel burnt.• It increases the competitiveness of other non-carbon technologies.•It helps to protect the environment and also to raise revenues.

Carbon dioxide-Global Warming Contributor

• CO2 is a heat trapping green house gas.• The scientific consensus is that human induced greenhouse gas emission are the primary cause of global warming.• world wide 27 billion tones of co2 are produced by human activity annually.• Carbon taxes are one of the policies available to govt. to reduce greenhouse gases emission.

2.Fuel Tax

Fuel tax is an excise tax imposed on the sale of fuel. In most countries the fuel tax is charged on fuels which are intended for transportation.

Effects• Because of the relatively inelasticity of demand for petrol, in the short run the tax will be an effective source of revenue.• In the long run the demand is more elastic, so people reduce the consumption as the price increases.

• Many European countries use a fuel tax to decrease dependence on fossil fuels.• Cross –boarder purchasing of motor fuel. • It has a great role in energy policy.

3.Natural Resource Consumption Tax

The Natural Resource Consumption tax is a kind of tax to helps to ensure the long run sustainability by making people be more aware of natural resource consumption.

International Water

The popular conception of inter national waters is that there is no owner for them . So anyone can take advantage of them.

Sovereignty Territory

At present property laws govern this issue. Natural resources are bound to the land and offshore natural resources are deemed to be owned by the state.

4.Pigovian Tax

A pigovian tax is a tax levied on a market activity that generates negative externalities. The tax is intended to correct the market outcome.

Working • It is considered as one of the traditional means of bringing a medium of market forces.• An alternative to pigovian taxation has arisen, the creation of a market for `pollution rights’.• Pigovian taxes are often more appealing to policy makers because giving out the rights for free allows polluters to lose less profits or even gain profits relative to the unaltered market case.•One difficulty with pigovian tax is calculating what level of tax will counterbalance the negative externality.

Pollution taxes

The alternative regulation is viewed as having a higher costs to society because pigovian taxes raise revenue and respond automatically to change in the market such as lowered cost of production or pollution mitigation.

5.Land Value Tax

Land value taxation is an ad valorem tax on the value of land. This ignores buildings, improvements and personal property. Because of this land value tax is different from other property taxes.

Effects • Most taxes distort economic decisions.

* If labor or machinery and plants are taxed people are dissuaded from constructive and beneficial activities and enterprise and efficiency are penalized due to the excess burden of taxation.• Land value tax forces people to devote land to its most productive use in order to be able to afford the tax, even if they want to use it for a less productive use.

Thank You