Global Conference on Environmental Taxation
H. William Batt
[A report of the Seventh Annual conference, held in Ottawa, Canada,
22-24 October, 2006. Reprinted in
GroundSwell, January-February 2007]
What began as a brilliant conference idea by four academics in
Cleveland in 2000 has blossomed into an annual worldwide meeting of
minds attended this year by over 250 people. It continued as an
annual event then to Vancouver, to Vermont, to Sydney, to Italy, to
Belgium, and this year to Ottawa. Next year is Munich's turn, then
on to Singapore in 2008, Lisbon in 2009, and Bangkok in 2010. I
presented two papers at the Woodstock, Vermont conference in 2002
where there were about fifty attending at the semi-private "Woodstock
Inn" owned by Lawrence Rockefeller. I was delighted to see what
has grown in four years since. As I did in 2002, I brought along
enough big yellow buttons that say Tax Bads Not Goods for everyone
to have one. It identified me for networking, and advertised the
Schalkenbach Foundation as the source of materials I made sure were
well displayed right across from the registration table. The Germans
now also distribute the same button!
Constitutionally speaking, governments have at their disposal only
two instruments by which to effectuate policy -- what are
conventionally known as "police powers" and "tax
powers." To be sure, not all revenue streams come from tax
powers -- witness traffic fines and tolls, various permit fees, and
pollution charges, which are typically grounded in the police powers
of government. Tax powers are usually those associated with income
and franchise taxes, property and sales and use taxes, various
tariffs, and so on. Over time public finance theory has thought of
revenue largely in terms of a means by which to support public
services, and tenets of taxation were supposed to interfere with
commerce as little as possible. The best taxes, it was thought,
should "rest lightly" on the economy so as not to distort
or inhibit free traffic in trade. So the ideal tax should be
neutral, efficient, equitable, simple, administrable, and stable.
The terms have varied somewhat from text to text, sometimes
shrinking to four in number, often expanding to include certain,
compatible, and transparent.
But neoclassical economics has had no place for the concept of
land rent, having discarded it along with the separate category of
natural resource capital -- i.e., "land" as used in
classical and Georgist economics. So contemporary economics, helped
by the work of Arthur Pigou, has invented the concept of
externalities, relying on corrective tax mechanisms to recover what
costs are imposed on society. But it can be cumbersome and difficult
to apply in the real world. Nonetheless, this is the framework that
dominates the thinking of most green tax conference participants. To
most, environmental taxation is a matter of cleaning up around the
edges of a basically sound economic system. If the keynote speaker,
Lester Brown, spoke about the dire need to wean ourselves from
fossil fuels, it was still envisioned within the framework of
conventional free-market models. But there is a place for Georgist
thought in this community of discourse, as many conference
participants are very close to fathoming what it is that we are
talking about. Collecting economic rent from the goods and services
of nature would efficiently address a good part of what green taxers
would like to see come about.
With the world focused increasingly on greenhouse gases and global
warming, many of the sessions were devoted to various means of
addressing associated with fossil fuel consumption, toxic materials,
transportation, and the instruments that create them. Most of the
remedies considered, however, were piecemeal and targeted; little by
way of comprehensive theorizing was put forth. About half the
presentations were case studies.
It was also interesting to hear described the variety of
approaches being explored by the presenters, coming from a total of
thirty-one nations. One might have thought it would be dominated by
economists, but in fact the lawyers seem to outnumbered them. Most
attendees were public sector officials or academics, but there were
a number of NGOs represented, and even a few private sector people
-- like someone from Honda, notably! I noted that the Europeans seem
to be further ahead in their application of environmental taxes than
any other places. The size of country seems not to matter much.
Considerable discussion was devoted to whether green taxes inhibit
economic competitiveness, and this seems to be the excuse for much
of the Canadian lag, fearing loss of business to its neighbor to the
south. But Europeans already have their answer. Canadian government
officials, researchers, academics, non-profit representatives, and
students were there in such substantial numbers that one would
expect an impact on policies to occur soon.
As much attention was given to reducing and eliminating subsidies
for detrimental practices as to the institution of green taxes
themselves. Germany, for example, has taken significant steps to
replace many of its harmful practices, even though the evidence is
just beginning to bear fruit in data studies. The European Community
is working assiduously to integrate its environmental measures, many
of which involve adjustments in their tax regimes. The greatest
advances appear to be possible in the energy and transportation
sectors, even though these measures often involve international
cooperation and cannot be effectively imposed on a
country-by-country basis. Many of the sessions explored means by
which to enhance international cooperation, especially within the
framework of the Kyoto protocol and whatever is likely to follow.
Lastly, there were several panels on how best to integrate and
chose between command-and-control approaches and taxing approaches,
recognizing that governments have been too often tempted to rely
overly on the former. The greatest limitation, in the minds of
several observers, is the lack of adequate data, making it difficult
to demonstrate the feasibility or success of various measures
proposed or already in effect. That a conference dominated by
lawyers should have reached this conclusion is remarkable, and it
suggests that there is ample potential for more work in this area,
both for research and advocacy. The Munich conference in October,
2007, sponsored by Green Budget Germany, www.eco-tax.info, promises
to bring even greater interest and cogency to a burgeoning new field
of discourse.