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Despite the potential described above,
. Although there are many marketbased
approaches globally, the share of environmental
taxes as a percentage of total tax receipts is small and
even decreasing in some countries (see Figure 7.3).
Fully-implemented levies on harmful products are rare.
The level of tax receipts from environmental taxes was
about 6.4% of GDP in the EU in 2006; it has been
recognised that this could usefully be significantly increased
(Bassi et al. 2009), but also that political
resistance is still substantial.
At pan-European level, a comparative study by the
Council of Europe of tax systems specifically targeting
biodiversity suggests that tax incentives are underdeveloped
as a mechanism and do not make a targeted
contribution to strengthening ecological
networks: they are generally fragmented and
(Shine
2005).
By leaving
actors free to choose between reducing resource use
or paying the price, they cannot reliably secure sitespecific
conservation goals to safeguard threatened
ecosystems or species. Moreover, since inflation may
erode the dissuasive effect of taxes, fees or charges
over time, rates have to be continuously reviewed and
adapted. When setting up permit trading schemes,
determining the ‘safe load’ (i.e. number of permits to
be issued) requires a detailed analysis of the ecosystem
at stake. Experience suggests that incentivebased
solutions rely on trying one thing, failing and
then trying another (Bayon 2004). For these reasons,
MBI should only be applied where trial-and-error is
appropriate i.e. where failures do not lead to severe
and unacceptable damages.
The
. In many countries raising taxes
is likely to raise more political resistance from affected
interest groups than complex technical requirements
set by environmental standards. Administrative requirements
are also quite high, especially for operating
permit markets. There may be also ethical and equity
issues at stake. Some see a charge, a tax or a quota
as a paid right to pollute or to degrade the environment
which may be ethically questionable. Such instruments
can be perceived as unfair as the rich can more easily
pay than the poor.
This means that
tradable permit markets for use of ecosystem services are
difficult – if not impossible – to implement in countries with
weak institutions and regulatory regimes. The aim should
not to develop MBI as a substitute for direct regulation, but
to create smart policy mixes that provide more flexibility for
targeted actors to achieve environmental goals (see 7.6).
Such policy mixes can minimise abatement costs to pave
the way for more ambitious conservation goals.
TEEB FoR NATIoNAL AND INTERNATIoNAL PoLICy MAKERS - ChAPTER 7: PAGE 26