Green Growth Indicators 2017
Green growth policies need to be founded on a good understanding of the determinants of green growth and need to be supported with appropriate indicators to monitor progress. This book presents a selection of updated and new indicators that illustrate the progress that OECD and G20 countries have made since the 1990s. It updates the 2014 edition.
Taxes and subsidies
Market-based instruments play a key role in facilitating the transition towards green growth. Compared to regulatory instruments, such as emission limits or prescriptive technology standards, environmentally related taxation encourages the lowest-cost abatement across polluters. It also provides incentives for abatement at each unit of pollution. In addition, the revenue raised can be used to support fiscal consolidation or to reduce other taxes (e.g. taxes on labour and capital that distort the labour supply and saving decisions). Shifting the overall tax burden away from labour and capital towards environmentally harmful consumption and production patterns, while maintaining the overall level of redistribution constant, can improve economic efficiency.
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