Download EEA: European Environment Agency

Economic policy instruments for
water
activities at EEA
Mikael Skou Andersen
European Environment Agency
EEA: European Environment Agency
•
“The EEA aims to support
sustainable development
and to help achieve significant
and measurable improvement
in Europe’s environment…
•
… through the provision of
timely, targeted, relevant and
reliable information to policy
making agents and the public”
•
EEA is an independent EU
i
institution
i i
with
i h 32 member
b
countries incl. Turkey,
Switzerland and Norway
•
Executive director: Prof.
Jacqueline McGlade
Member countries
Collaborating countries
•
200 staff in Copenhagen
headquarters - and 6 Topic
Centres with wide network
throughout Europe
European Environment Agency
1
Ecotaxes a good idea ?
EU
UK
FI
SW
PO
NL
LU
IT
IR
F
ES
GR
GE
DK
BE
A
agree strongly
agree
disagree
disagree strongly
0
20
40
60
80
100
Eurobarometer
per cent
European Environment Agency
Ecotaxes and economic growth
EUUK
FI
SW
PO
NL
LU
IT
IR
F
ES
GR
GE
DK
BE
A
yes, even if they slow
economic growth
yes, even if they slow
significantly
only if no slowing
0
20
40
60
80
100
Eurobarometer
per cent
European Environment Agency
2
Water use: GDP/capita – and price ?
150
CY
IE
CH
m3 water per capita
125
HR
LV
IT
100
UK
FR
ES
MT
75
Fyrom
50
BG
RO
TR
25
SE
FI
PT
HU SK
EE
CZ
PL
DK
SI
EL
AT NL
DE
BE
LT
0
0
20
40
60
80
100
120
140
160
GDP per capita
European Environment Agency
Environmentally-related taxes today
• are defined by OECD (2003) as
• any compulsory, unrequited payment to
general government
• levied on tax-bases deemed to be of
particular environmental relevance
• categories used by Eurostat
• Energy / Transport / Pollution / Resources
European Environment Agency
3
Environmental tax revenues of GDP
2009
European Environment Agency
Environmental tax revenues as a share of total
revenues from taxes and social contributions
European Environment Agency
4
European semester
• ’Annual
Annual Growth Survey
Survey’ 2011 guidance
• indirect taxes more growth friendly than
direct taxes and broadening tax bases is
preferable to increasing tax rates
• unjustified subsidies, e.g. environmentally
harmful subsidies should be eliminated
• Euro Plus Pact (March): tax coordination
• New framework of integrated economic
policy integration within EU
European Environment Agency
Benefits of broader tax base
• Taxes on labour are distortionary
y
• Environmentally-related taxes reflecting
external costs are not distortionary
• Revenue recycling: neutral tax shift will
benefit the economy (and the
environment)
European Environment Agency
5
Ireland: absence of water charging
consumer baskets:
12
12
10
per cent (euro-area)
8
6
4
8
6
4
2
0
0
water
sewerage
refuse
electricity
Ireland
gas
solid fuels
heat
transp fuels
20
10
20
09
20
08
20
07
20
06
20
05
20
04
20
03
20
02
20
01
20
00
19
99
19
98
19
97
19
96
2
20
10
20
09
20
08
20
07
20
06
20
05
20
04
20
03
20
02
20
01
20
00
19
99
19
98
19
97
19
96
per cent (Ireland)
10
water
sewerage
refuse
electricity
gas
solid fuels
heat
transp fuels
Euro-area
European Environment Agency
The potential for new environmentallyrelated taxes in Italy
based on experiences in other European countries:
• Increase taxes on electricity and gas for households and business
• Increase taxes on mineral oils and consider tax on coal
• Increase vehicle taxation to average of EU-15
• Introduce euro-vignette for heavy-goods vehicles
• Adjust rates of waste and air pollution taxes to higher levels
• Introduce taxes on packaging, pesticides and water pollution
• New national tax on water abstraction
Reform environmentally damaging subsidies:
Company car subsidies to be limited
Phase out exemptions for energy taxes etc.
Abolish reduced rates and normalise VAT for gas & electricity
Result: new ratio of 10-11 % of total taxes
European Environment Agency
6
Full-cost pricing
• EU Water Framework Directive art. 9 stipulates
i t d ti
introduction
off ’f
’full-cost’
ll
t’ water
t charges
h
• The principle of recovery of the costs of water services,
including environmental and resource costs
associated with damage or negative impact on the aquatic
environment should be taken into account in accordance
with, in particular, the polluter-pays principle
• An economic analysis of water services based on longterm forecasts of supply and demand for water in the river
basin district will be necessary for this purpose
• Member states shall ensure by 2010 that water-pricing
policies provide adequate incentives for users to use
water resources efficiently
European Environment Agency
General definitions (OECD, Eurostat)
• Tax:
• unrequited payment, for which no service is provided
• User charge:
• payment for a service to users (water supply +
discharge)
• DE: Lenkungs-abgabe (French: redevance)
• Levy where tax rates are linked and ear-marked to
predefined purposes – specific public good is
provided
European Environment Agency
7
Subsidies support excess demand
European Environment Agency
Water pipe leakage rates
European Environment Agency
8
Water abstraction tax:
reduced leakage ?
• Resource rent
• Ground water abstraction
taxes
• often small and not
significant for leakage
Country
Domestic
Industry
Agriculture
0.06-0.08
0
06 0 08
0.09
0.10
0.002
0.20
0.01
0.67
0.06
0
06
0.04
0.002
-
0.06
0
06
0.04
0.02
-
euro/m3
• Denmark
• If metered water less
than 90% of abstraction,
waterworks liable to pay
Belgium
B
l i
Czech Rep
Germany
Hungary
Netherland
Poland
Denmark
European Environment Agency
Emission taxation: COD and P
European Environment Agency
9
Strategic decision:
how much WWTP capacity ?
Denmark
• End-of-pipe approach
• WWTP operated by local
authorities
• Huge additional capacity
for industry
Capacity (IE/capita)
3.0
Netherlands
2.5
• Prevention approach
• Levies for discharges
caused industry to
reduce at source
• Less wastewater, big
savings!
2.0
1.5
1.0
0.5
0.0
Denmark
1988
France
Netherlands
1998
European Environment Agency
Fe+ optimisation with P-tax (15 €/kgP)
and incineration tax for sludge
Economically
most
effective
0.3 mgP/l
Mandatory
emission
value
1.5 mgP/l
European Environment Agency
10
How and where to institute payments for
efficient management ?
Wastewater treatment plant
(WWTP)
Abstraction
Sewerage system
European Environment Agency
Groundwater
Waste water services - % of GDP
Share of GDP, %
0.90
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.0
European Environment Agency
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Where environmental fiscal reform
can make a difference
Health
SO2
Waste
●
●
Biodiversity
Packaging
Carbon- Minerals
energy
●●
●●
●
Climate
●●
●
●
●●
●
Tax
system
●
●
●
●●
●●
●● significant effect
● some effect
European Environment Agency
Thank you for your attention
http://www.eea.europa.eu
European Environment Agency
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