Green eco taxes – is it just a matter of time?

During the recent election in the UK there was a lot of talk about the climate emergency, but not all together surprisingly little about green taxes. It strikes us at GoReusable as inevitable that green taxes will have to be introduced in the next 1-3 years if the Government is serious about hitting their CO2 emissions targets, so we’ve put our heads together to try and predict some of the taxes that will start to come into play.

We should add that it is right that polluters should have to pay for their polluting. We believe this would be a fairly easy sell to the public on the whole and it’s about time these were introduced to reflect the true cost of the polluting to society. We don’t necessarily believe governments should introduce these to increase the overall tax burden on society, so introducing green taxes could mean lowering taxes in other areas, such as perhaps income tax.

We also don’t expect the green eco taxes to be fully introduced in one go, but staggered in over a period of 5-10 years. For instance, the true environmental cost of a short haul flight may be £40 both ways. If the government introduced an initial green tax of £5 initially most flyers would easily be able to absorb these and introducing over time would give industries and consumers time adapt to these additional charges.

Here are some of the green taxes that we can expect to come into play:

– taxes on flights – this is an easy target and a heavy polluter and easy to tax. This should be done.

– taxes on energy consumption. Let’s take a look petrol green taxes – some energy companies such as Shell would argue they are offsetting their carbon emissions with the carbon credits they are generating from their sustainable energy. While this softens the argument for introducing green taxes, offsetting should be a last course of action and only used for the short term. In the longer, the next 5 years, if petrol companies have not hit certain carbon reduction targets then perhaps you need to start to introduce green taxes the consumer pays at the petrol pump.

– single use plastics – while there has been a lot of talk about reducing the amount of single use plastics in society and there have been some innovations to find alternative biodegradable versions, we still use a lot. This might be easier to target tax the manufactures of these plastics. When it comes to single-use coffee cups in coffee shops, while the take up of reusable cups has helped, introducing a 25p levy on single-use cups seems inevitable.

– Pastoral (meat producing) farmers – green taxes on meat would not go down well with farmers or the public. However, we know that eating more veg and less meat is good for the environment, so instead of adding green taxes to meat, why not have lower VAT/tax rate on veg and fruit to encourage more consumption of these? Eating more veg is better for your health as well.

– Fashion industry – over the past 10-20 years we’ve witnessed the growth in fast fashion. Clothes that are only really designed to be worn a few times and produced in China and are sold at crazily attractive prices in shops. The amount of pollution this has created is widely accepted as huge. Should there be some form of eco tax on these fast fashion items? Surely adding 10% tax( to the consumer) for fast fashion items (mostly made with cheap man-made fibres) is a no brainer.

– taxes on property development – for example, building a new house creates a lot of carbon and the environmental return can easily be 50-80 years. The creation of cement alone is one of the biggest polluters in the world. There probably should be a one off green tax the property owner would have to pay depending on the energy efficiency of the property and the size of the build/home. Some London Boroughs, such as Kensington & Chelsea already charge developers for the carbon produced for building works and infact expect them to offset locally in the borough at £1,800 per carbon tonne (that is expensive!).

Interestingly, industries may complain that introducing green taxes will make UK companies uncompetitive. This probably is a fair argument and would suggest that it will be better to add green taxes to the end consumer, in the form of VAT. That way only goods consumed in the UK would be affected and not those sold abroad.

While we are not tax experts we do clearly believe, regardless of how unthinkable this would be 30 years ago (like the successful sugar tax introduced recently) the timing is now right to start introducing green taxes, and we hope this article stimulates this debate. Moreover this should be an easy sell for the Government and an opportunity they should seize with both hands. It’s in fact unusual for any tax to be welcomed, but green taxes given the climate emergency would be universally agreed by all parties. It would be hard for any party to argue against them?

We’d be interested to know what you think should be done.