TransformTax initiative spearheaded by Green Alliance to assess how UK tax system could be better used to benefit environment and drive low carbon lifestyles
A three-year project to explore how the UK tax system can be better harnessed to benefit the environment by driving the adoption of low impact lifestyles, jobs, and economic prosperity has been launched by environmental think tank Green Alliance.
Supported by the Joseph Rowntree Charitable Trust, an expert steering group featuring a host of climate policy specialists and economists has been set up by Green Alliance to carry out research and offer recommendations for UK tax system reform.
The TransformTax project will take a "multidisciplinary approach", looking at the history of taxation, behavioural science, analysis of alternative taxation approaches used abroad and comparisons of fiscal instruments, according to the think tank.
It comes amid growing support for the concept of using tax reform to help support the UK's climate change targets. The Committee on Climate Change (CCC) is just one of several organisations which has suggested the government look at how it could shift taxation towards fossil fuels while also curbing subsidies for high carbon sectors. It has also argued carbon pricing should play a role in driving a 'green recovery' to the Covid-19 crisis.
Meanwhile, the Treasury is carrying out a review of the costs associated with achieving the UK's 2050 net zero targets, which is set to report back later this year. Parliament's Environmental Audit Committee had also launched an inquiry partly looking at how future Budgets could be used to tax higher carbon activities, pollution, or waste.
OECD figures show that environmental taxes make up just under severn per cent of the UK's total tax revenue, placing the UK on a par with most of its EU counterparts. But Green Alliance argues there is scope to make far greater use of the tax system to benefit the environment - particularly as the vast majority of current green taxesare limited to taxes on petrol, gas, and electricity.
"We tend to think of the tax system as relatively fixed but, in fact, it is remarkably fluid," Green Alliance's head of resource policy Libby Peake wrote in BusinessGreen last week. "While taxes are a certainty of life, exactly what they are - including who and what they benefit - is far from fixed. Now is the time to rethink the how, what and why of tax."
Those appointed to the expert steering group include Arun Advani, assistant pressor in economics at Warwick University, Eunomia Research and Consulting chairman Dominic Hogg, and Loraine Whitemarsh, professor of environmental psychology at University of Bath.
Hector Pollitt, director and head of modelling at consultancy Cambridge Econometrics, and director of LSE's Grantham Research Institute on Climate Change and the Environment, Sam Fankhauser, have also been added to the steering group.
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