I believe we will need to tax our use of energy or emitting carbon to help, particularly the more developed countries, to adjust our habits.  Energy efficiency or using energy more sparingly is essential to mitigate climate change.  But as we are not going to make these lifestyle changes easily or fast enough so we need to incentivise people and businesses, through taxation, to help reduce our dependency on energy.  Also we cannot expect the developing world to make the same reductions as are required in the developed nations.  We all know the inequality in energy use in different parts of the world.

A report by the UK Green Fiscal Commission (GFC) was publicly launched in November 2009 (http://www.greenfiscalcommission.org.uk/) which looked in detail at the whole range of issues surrounding green taxes and environmental tax reform (ETR). The Commission’s work covered:
• How green taxes/ETR works
• The environmental, economic and social implications of ETR
• Attitudes to green taxes and ETR

The focus of the Commission’s work was the greening the UK tax system to make an important contribution to the cost-effective resolution of environmental problems.  For example, this could mean a levy of £3,300 for a new car for individuals and British business would expect a bill of £370 billion to help the UK Government mitigate climate change by 2020.

Will UK citizens and businesses see the long-term benefit of this taxation?  This is a prime example of the ‘Sustainability Dilemma’ – why should I pay £3,300 extra for a new car when it does not happen in other countries? and why should my business pay to fund the UK’s commitment to climate change as it could make UK companies internationally uncompetitive?

Can we get the world’s major economies to agree to adopt a green tax to try and help re-train consumerism without making their businesses uncompetitive?  It will be a brave government to be first to implement such a strategy.