(PDF) Environmental Taxes and Economic Growth

Added on - 03 Dec 2019

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Environmentaltaxes1
TABLE OF CONTENTSIntroduction......................................................................................................................................3Environmental taxes and its significance.........................................................................................3Identification of advantages and disadvantages using taxation in order to tackle environmentalissues................................................................................................................................................6Advantages of taxation in order to tackle environmental issues..................................................6Disadvantages of taxation in order to tackle environmental issues.............................................8Critical evaluation of considerations involved in process of designing suitable environmentaltaxes...............................................................................................................................................10Conclusion.....................................................................................................................................12References......................................................................................................................................132
ILLUSTRATION INDEXIllustration 1: Assessment of selected environmental taxes............................................................7Illustration 2: The static efficiency achieved through the least-cost pattern of abatement bycomparison of two types of polluter who have different abatement costs.......................................93
INTRODUCTIONEnvironmental taxes can be defined as the economic instruments used by governmentauthorities in order to provide effective solution to the environmental issues. Policies for thesetaxes are designed for the purpose of internalization of environmental costs. Along with this, itprovides incentives to individuals and commercial entities in against of promotion of sustainableecological activities (Kallbekken and Sælen, 2011). In the recent years, UK government hasmade diversification in their tax ranges for the purpose of enhancement of contribution in theimprovement of environment. Present assignment is focused on the evaluation of this legislationfor resolving environmental problems. For this purpose, advantages and disadvantages oftaxation will be described. In addition to this, critical evaluation will be done of the factors thatare considered in the process of designing suitable environmental taxes. For betterunderstanding, practical examples from the British economy will be considered in the descriptionof factors.ENVIRONMENTAL TAXES AND ITS SIGNIFICANCEEnvironmental taxes are the instruments used by government for the collection of costincurred to provide services in order to resolve damages of the environment. These taxes areimposed on services, prices of goods or on activities by which environmental damage is caused.These taxes will assist in the implementation of principal that polluter pays for the damages inorder to integrate economical and environmental policies in an effective manner. These aspectsprovide incentives to both customers and the producers in order to make changes in theirbehavior for making Eco-efficient use of available resources (Krass, Nedorezov andOvchinnikov, 2013). This aspect will also stimulate the structural changes and innovation inorder to comply with the described legislation.Mainly, there are three types of environmental taxes in accordance with their policyobjectives. Description of these taxes is enumerated below-1.Cost covering charges-These taxes are designed to cover the expenses of abatementmeasures and environmental services. Example of these cost are water treatment or anyother ear market charges.4
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