Appetite for change - Accountancy Nieuws

pwc.com/appetiteforchangeFigure 21Reasons for supporting emissions trading schemesActively support emissions tradingImpact:• Allows government to set a ceilingon emissions levelsFlexible:• Gives companies choice overwhat’s best• Accommodates companiesthat cannot reduce emissions inabsence of right technologyMarket-based:• Belief that market is a bettermechanism for developing themost efficient solutionsVoluntary (not mandatory):• More acceptable to private sectorReward-based (not penalty):• Scope to reduce cost/makemoney, opportunity to becost neutral• Brings competitive advantage• More acceptable to private sectorStimulus:• If money is saved, investmentin cleaner/greener technologicalsolutions will inevitably followConcern over carbon taxExecutives prefer the hypothecationof carbon and environmental taxesImpact:• There is no specific ceiling setfor emissions - governmentmust estimate the appropriatecarbon price.Burden:• Already feel over-burdenedwith taxEnforcement:• Requires government control toprevent tax evasion/avoidanceLost opportunity:• Revenue raised would not beused for environmental initiativesImpact on products and services:• Companies would try to recoupby passing cost onto consumerDemotivating:• No opportunity to benefit, onlya cost• Disincentive to growth, badfor economyand 11 on page 19). Companies in India, Brazil and Chinahave a very positive attitude. They are not currently subjectto emissions targets but many profit from emissions tradingby selling carbon credits through the Kyoto Protocol’s cleandevelopment mechanism. In China, 28 per cent of businessesparticipate in an emissions trading scheme, and 92 per centof all businesses support the idea (see fig. 10 on page 18 andfig. 11 on page 19).Executives prefer the hypothecation of carbon andenvironmental taxes, i.e. the use of taxes to fundenvironmental and low carbon programmes. New taxproposals always raise concerns about increasing costs andcompetition from lower-taxed regions, but there is a strongcase for balancing carrots and sticks in environmental policy.Business leaders would of course prefer that newenvironmental taxes do not increase their tax obligations.In the EU, offsetting environmental taxes with other taxreductions is formally called Environmental Fiscal Reform(EFR). Evidence from Denmark, Germany, the Netherlandsand Sweden suggests that EFR usually makes the taxsystem more business-friendly, according to the EuropeanEnvironmental Bureau. Sweden, for example, revised itsenergy tax system in 1991. The Swedish government creditsthe resulting combination of credits and incentives withreducing carbon emissions by nine per cent (as of 2006),while the economy was growing by 44 per cent. 16 The carbontax was accompanied by a reduction of general energy taxesby 50 per cent and new exemptions to further incentivise theuse of low carbon energy. 1716Gwladys Fouché, “Sweden’s carbon-tax solution to climate change puts it top of the green list,” guardian.co.uk, 29 April 2008.17Bengt Johansson, “Economic Instruments in Practice 1: Carbon Taxes in Sweden,” Swedish Environmental Protection Agency, 8.Appetite for change. PricewaterhouseCoopers. 31