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Ecotaxation Costs

As with any introduced policy that costs industry and consumers money, there are some critics of green taxes.

Some suggest that any green tax will impact poor people more than rich. For example if a tax is placed on electricity usage, the poor will find it harder to find the money to pay that additional cost. However, there are ways to overcome this problem. For example, tax could be adjusted according to income.

Other critics suggest that the monetary gain from the taxes will not be used for environmental protection. This criticism fails to take the point that the idea behind an eco-tax is not to gain money but to prevent people from damaging the environment.

Ecological tax reform is a very slow process. While this should certainly not be a reason to avoid using it, there is the risk that other, quicker fixes will take priority.

In 2002, the Balearic Islands introduced a tax on tourists that was intended to provide funds for specific environmental projects. Since the introduction of the tax (which added approximately $99US on to a typical holiday for a family of four), visitors to destinations such as Mallorca, Ibiza, Menorca and Formentera have reduced, leading to the tax being withdrawn. A spokesperson for Thomas Cook said: 'We welcome the withdrawal of the tax. Customers said it played a part in them looking at other destinations, and Ibiza and Menorca have dropped in popularity.' This reduction in tourist trade accepted, perhaps the reduction in visitors and therefore pressure on the local environment, means that the tax has actually done its job!

Energy industries are naturally one of the biggest opposers of green tax, as they are concerned it will have a big financial impact, making them uncompetitive. There will always be losers when taxes are imposed (producers and consumers paying more), but everyone is a winner with a better environment.

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