Environment taxes

Stig Sollund
Director General
Tax Law Department
Ministry of Finance
Norway
Introductory presentation on Agenda 2 of IFAD meeting of nited Nations Group of !xperts
on Domestic "esource Mo#ilisation $ A discussion of !nduring and !merging Issues
"ome% &'( Septem#er 2))*
INTRODUCTION
T+e glo#al community is facing immense c+allenges in dealing wit+ en,ironmental issues-
.ro#lems of pollution and ecological degradation are not confined to national states $se,ere
as t+ey may #e regionally and locally' #ut t+ey impact on li,ing conditions on t+e eart+ as a
w+ole- T+e urgency of reducing green+ouse gases to cur# climate c+ange +as #een
documented #y the IntergovernmentalPanel on Climate Change
1
and is underlined i-a- #y t+e
Stern Review: The Economics of Climate Change
2
% w+ic+ sums up t+e situation wit+ t+e
statement t+at The scientific evidence is now overwhelming: climate change is a serious
global threat and it demands an urgent global res!onse"#
T+e conclusions of t+e Stern "e,iew gi,e strong messages on t+e economic impacts/
0limate c+ange could +a,e ,ery serious impacts on growt+ and de,elopment
T+e costs of sta#ilising t+e climate are significant #ut managea#le1 delay would #e
dangerous and muc+ more costly
Actions on climate c+ange is re2uired across all countries% and it need not cap t+e
aspirations for growt+ of ric+ or poor countries
T+e situation is% +owe,er% not yet +opeless if appropriate measures are put in action on t+e
international le,el/
T+ere is still time to a,oid t+e worst impacts of climate c+ange% if we ta3e strong
action now
A range of options exist to cut emissions1 strong% deli#erate policy action is
re2uired to moti,ate t+eir ta3e up
0limate c+ange demands an international response% #ased on s+ared understanding
of long'term goals and agreement on framewor3s for actions
Imposition of 4traditional5 taxes to cur# emission of green+ouse gases can only play a
contri#uting role in t+e o,erall solutions- 6t+er forms of taxation #ased on mar3et
7
I.00 was esta#lis+ed in 7899 #y t+e :orld Meteorological 6rgani;ation 4:M65 and t+e nited Nations
!n,ironment .rogramme- A Fourt+ 4compre+ensi,e5 Assessment "eport 4A"&5 is announced to #e pu#lis+ed I
<& of 2))*- Information on t+e I.00 organisation and wor3 is found on +ttp/==www-ipcc-c+-
2
See +ttp/==+m'treasury-go,-u3=independent>re,iews=stern're,iew>economics>climat- See also Green .aper
from t+e !uropean 0ommission to t+e 0ouncil% T+e !uropean .arliament% T+e !uropean !conomic and Social
0ommittee and t+e 0ommittee of t+e "egions% $da!ting to climate change in Euro!e % &!tions for E' $ction
?S!042))*5 9&8@% issued on 28 Aune 2))*-
mec+anisms li3e t+e cap and trading of emission credits under t+e Byoto .rotocol may #e
effecti,e and efficient tools in com#ination wit+ ot+er internationally agreed measures-
C

!n,ironment taxes +a,e certainly a #roader field of application t+an targeting car#on
emissions% as will #e exemplified in t+is paper- Suc+ taxes may ser,e t+e dual functions of
installing incenti,es and disincenti,es in order to correct detrimental #e+a,iour w+ilst #eing a
source of fiscal re,enue t+at can alle,iate t+e tax #urdens in ot+er parts of t+e tax mix% and
t+ere#y impro,e economic efficiency and contri#ute to economic growt+-
ENVIRONMENT TAXES, WHAT ARE THEY?
:+en tax is imposed on a polluting or en,ironmentally +armful su#stance or acti,ity% it
introduces an economic cost t+at t+e polluter will ta3e into account w+en ma3ing t+e decision
on w+et+er or not to carry on t+e acti,ity or% +ow it is done or its extent- T+is applies w+et+er
t+e acti,ity is part of a production process% consumption% or t+e way waste is disposed of-
Darming t+e en,ironment can #e seen as claiming a ser,ice from nature- T+e producer or
consumer s+ould #ear t+e full costs of t+eir ,arious input factors so as to ensure t+at
production and consumption is economically Eustifia#le% and t+at in+erent or ensuing costs are
not carried o,er to ot+ers- Introducing a well measured tax implies t+at t+e rele,ant e(ternal
costs are internalised in t+e decision process-
!n,ironment taxes effectuate the !rinci!le that the !olluter shall !a)"
T+e 6!0D% I!A and t+e !uropean 0ommission +a,e agreed to define environmentall)
related ta(es as any compulsory% unre*uited payment to general go,ernment le,ied on
tax'#ases deemed to #e of particular en,ironmental rele,ance- T+e rele,ant tax'#ases
include energy products% motor ,e+icles% waste% measured or estimated emissions%
natural resources% etc- Taxes are unre2uited in t+e sense t+at #enefits pro,ided #y
go,ernment to taxpayers are not normally in proportion to t+eir payments-
Re*uited compulsory payments to t+e go,ernment t+at are le,ied more or less
in proportion to ser,ices pro,ided 4e-g- t+e amount of wastes collected and treated5 can
#e la#elled as fees and charges" T+e term lev) co,ers #ot+ taxes and fees=c+arges-
&

According to t+e 6!0D 2))F "eport
(
a data#ase operated in cooperation #etween 6!0D and
t+e !uropean !n,ironment Agency 4!!A5 +as entered C*( en,ironmentally related taxes in
6!0D mem#er countries% plus some 2() en,ironmentally related fees and c+arges in t+ose
countries- 6f t+e ta(es% t+e largest num#er is le,ied on energ) !roducts 47()5% on motor
vehicles 472(5% and ,arious forms of waste 4()5-T+ere is a wide range of en,ironmentally
related taxes currently le,ied in t+e 6!0D'countries% among ot+ers/ water pollution tax%
#atteries tax% logging tax% tyres tax% #e,erage container tax% toxic waste le,y% tax on plastic
#ags% aircraft noise tax% tax on groundwater extraction% tax on pesticides% and artificial
fertilisers% landfill tax% o;one depletion tax etc-
!n,ironmentally related taxes are% of course% also le,ied in ot+er parts of t+e world1 in 0+ina a
tax on wooden c+op stic3s was increased t+is year in order to protect forests- According to a
news report 0+inese consumers use and dispose of &( #illion pairs of wooden c+opstic3s
annually% re2uiring logging of 2( million trees-
C
T+e case for using mar3et #ased instruments as a supplement to ot+er regulatory measures in order to
en,ironment policy o#Eecti,es is i-a- made in t+e ! +reen Pa!er on mar,et-based instruments for environment
and related !olic) !ur!oses ?S!042))*5C99@% issued on 29 Marc+ 2))*-
&
6!0D 2))F% The Political Econom) of Environmentall) Related Ta(es ISGN 82'F&')2((2'8-
(
See pre,ious footnote-
Tax re,enues raised #y countries from en,ironmentally related taxes represent on a,erage
a#out 2'2-(H of GD. in 6!0D countries% #ut t+is figure ,aries significantly among countries%
from more t+an CH in Scandina,ian countries% t+e nited Bingdom% Tur3ey and t+e
Net+erlands% to less t+an 7H in t+e nited States-
F
Also t+e s+are of en,ironment tax as per
cent of total tax re,enue ,aries significantly% #eing in t+e order of F'*H on a,erage in t+e
6!0D countries- T+is figure is% of course not only resulting from t+e tax mixes #ut is also
influenced #y t+e le,el of traditional taxes li3e income tax and IAT in eac+ country-
ISSUES AND CONSIDERATIONS REATIN! TO THE EVYIN! O"
ENVIRONMENT TAXES
T+e aim and purpose of en,ironmental taxes is to cur# or reduce t+e extent and amount of t+e
use or consumption of +armful su#stances or acti,ities% or depletion of a resource- :+en t+e
imposition of t+e tax is well targeted% it will add to t+e costs of t+e su#Eect paying t+e tax- T+e
adding of costs to a producer wit+in one country or region% t+at is not imposed on producers
outside t+at country or region% may of course impact on t+e competiti,eness of t+e local
producer- T+e result may #e t+at a polluting acti,ity is reduced in geograp+ical areas w+ere
en,ironmental standards are +ig+er% and increased or ta3en o,er #y competitors in places wit+
laxer regulatory regimes-
Go,ernments t+erefore may need to consider a smoot+ introduction of a new en,ironmental
tax o,er a p+asing in period% rat+er t+an a#ruptly imposing tax t+at dramatically c+anges t+e
terms of mar3et competition o,ernig+t- 6t+er measures may #e to e(em!t certain industries or
parts t+ereof% or to couple t+e le,ying of a tax wit+ refund mechanisms or to economically
support certain sectors in a transitional period% t+us a#ating t+e effects of t+e tax-
Suc+ measures to cus+ion t+e effects of a tax will tend to reduce its effecti,eness% #ut may #e
politically necessary in order to introduce t+e tax in t+e first place-
Also% introducing a general en,ironmental related tax may +a,e distributional effects t+at
raise concerns% in particular w+ere suc+ effects are regressive in t+e sense t+at t+ey impact
more on consumers wit+ low capa#ility to pay and relati,ely less on t+e wealt+y part of t+e
population- If% for example% a significant le,y is introduced on dri,ing motor ,e+icles in
certain ur#an areas% t+e le,y may #e effecti,e in reducing t+e total amount of traffic #ut also
+a,e t+e effect t+at less wealt+y +ouse+olds are pre,ented from dri,ing c+ildren to sc+ool
w+ile it does not affect t+e well off- In order to mitigate t+e o,erall negati,e economic
distri#uti,e effects of certain taxes and le,ies% Go,ernments may need to consider ot+er
c+anges to t+e tax system to alle,iate t+e tax #urden of low income citi;ens% e-g- #y adEusting
t+e lower tax #rac3ets-
Anot+er issue t+at needs to #e addressed is t+e administrative costs and difficulties-
!n,ironmental taxes often can #e simple and easy to administer at low costs% #ut w+ere
exemptions and refund mec+anisms are applied t+is may c+ange t+e picture-
A recent example demonstrating +ow difficult considerations needed to #e #alanced
w+en a new en,ironment tax was introduced% was t+e Norwegian tax on nitrogen
o(ides ./&(0 first imposed from 7 Aanuary 2))*- T+e introduction of t+e tax was
deemed necessary in order t+at Norway s+all #e a#le to meet t+e o#ligations under t+e
Got+en#urg .rotocol and reduce N6x'emissions #y 2)7)- T+e main sources of suc+
F
6!0D 2))F-
emissions in Norway are t+e domestic s+ipping% petroleum extraction% road transport%
t+e coastal fis+eries and certain industries- Alt+oug+ t+e tax rate at t+e introduction
was at t+e low le,el of 7( N6B per 3ilo% and for practical reasons only energy
production #y larger engines and plant in sectors representing ((H of t+e emissions
were targeted% it was deemed necessary to couple t+e tax wit+ significant
compensatory payments to support certain affected industries w+ilst also esta#lis+ing
su#sidy arrangement in support of ot+er direct measures to reduce N6x'emissions-
COM#ININ! ENVIRONMENT TAXES WITH OTHER MEASURES AND
INSTRUMENTS
Imposing tax on an acti,ity or su#stance% of course% is a measure applied to put limits and
constraints to somet+ing t+at can #e legally carried on% used or consumed- 0ertain acti,ities
and su#stances are +armful to suc+ a degree t+at Go,ernments% eit+er on its own initiati,e or
#ased on international agreements% outrig+t pro+i#it or #an t+e acti,ity- Suc+ pro+i#ition can
#e put in place more or less smoot+ly o,er a p+asing in period- 6ne well 3nown success story
in t+is regard is t+e 1ontreal Protocol on Substances That 2e!lete the &3one 4a)er signed in
789*- T+e treaty stipulates t+at t+e production and consumption of compounds t+at deplete
t+e o;one in t+e stratosp+ere $c+lorofluorocar#ons 40F0s5% +alons% car#on tetrac+loride and
met+yl c+loroform s+all #e p+ased out #y 2))) 42))( for met+yl c+loroform5- Alt+oug+ t+e
#an +as #een largely successful it is not 7))H effecti,e as it is not yet uni,ersally
implemented-
:+ere a +armful acti,ity or su#stance is not generally disallowed% its application can #e
limited b) regulation" Typically legislation may allow t+e acti,ity only to a certain extent #y
aut+orisation or permits- In suc+ cases t+e imposition of en,ironmentally related taxes can #e
applied as an effecti,e measure in com#ination wit+ t+e regulatory measure-
Direct regulation can also #e used as a #asis for allocation of tradable !ermits" :+ere a cap
on an acti,ity is imposed and a trada#le permit is issued t+roug+ auction or allocation in
consideration for payment% t+e effect is similar to t+at of imposing a tax on t+e acti,ity-
T+e pro#a#ly #est 3nown example of a trada#le permits system on t+e international le,el is
t+e 5)oto Protocol to the 'nited /ations 6ramewor, Convention on Climate Change
7
"
0ountries t+at ratify t+e protocol commit to reduce t+eir emissions of car#on dioxide and fi,e
ot+er green+ouse gases% or engage in emissions trading if t+ey exceed t+e set limitations- T+e
emission reduction o#ligations run t+roug+ t+e period 2))9'2)72- T+e .rotocol +as #een
ratified #y more t+an 7F) countries contri#uting F)H of glo#al green+ouse gas emissions-
Negotiations will determine t+e fate of a future treaty to succeed t+e current one- T+e
!uropean nion +as signed up to t+e Byoto .rotocol in addition to its mem#er states and +as
esta#lis+ed an !'wide emissions trading system #ased on allocated emission targets and
2uotas-
Norway +as also ratified t+e Byoto .rotocol and is lin3ing up to t+e !'emission
trading system t+roug+ t+e !uropean !conomic Area 4!!A5'agreement- To enforce t+e
implementation of t+e Byoto o#ligation Norway +as esta#lis+ed a trading system
under t+e 0limate <uotas Act- Amendments to t+e act stipulate t+at to a certain extent
allocation emission permits must #e paid for- In t+is regard t+e system functions a3in
to a tax- In com#ination wit+ t+e emission trading system Norway also imposes 062'
*
+ttp/==unfccc-int-resource=docs=con,3p=3peng-+tml- = +ttp/==en-wi3ipedia-org=wi3i=Byoto>.rotocol-
taxes% w+ic+ means t+at some industries% nota#ly t+e petroleum extraction companies%
will #ot+ +a,e to pay 062'tax and pay for allocated emission permits-
!n,ironment taxes can also #e applied in com#ination wit+ negotiated agreements% su#sidies
and la#elling and certification systems 4informing producers and consumers in order for t+em
to ma3e informed c+oices5-
Annex
The history of green taxes in Norway
Norway has a long experience with environmental taxation. Taxes have been introduced to reduce
environmentally harmful emissions to air and water, and to reduce the amount of waste generated.
Taxation had of course an environmental impact long before taxes was established as an
instrument in environmental policy. Already in 1931 Norway introduced a petrol tax. The first tax
that had an explicit environmental purpose was levied on sulphur in mineral oil in 191. !owever,
a wide"spread use of environmental taxes was not seen until the late 19#$s and early 199$s.
Taxes on mineral fertilisers, pesticides and lubricant oil were introduced in 19##, %& ' tax on
petrol, auto diesel oil, mineral oil and the petroleum sector (only offshore) in 1991, while the
sulphur tax on mineral oil was increased substantially. *ince the early 199$s tax instruments have
played an important role in providing incentives for cleaner production and consumption patterns,
even though regulation has remained the main policy instrument to abate environmental damage.
+evelopments the last years have been comparably minor in revenue terms, but important
concerning introduction and improvement of taxes with environmentally"friendly incentive effects.
The main achievements have been introduction of environment tax on beverage pac,aging (199-)
and tax on final waste disposal ('$$$), both differentiated according to environmental impacts. A
low sulphur tax on coal, co,e and refineries was removed by the end of '$$1, after only two years
in operation. The last years there has also been some reduction of rates (in the %& ' tax on petrol
and offshore petroleum activities, which was brought more in line with rates for other
fuels.sectors).
/n Norway, -.' per cent of central government tax revenue is due to environmental and energy
taxes, e0uivalent to 1.1 per cent of 2+3 (estimates based on the '$$1 budget). A main part of this
revenue is taxes on energy consumption, not only having an environmental purpose, but
nevertheless having a positive impact on the environment. The level of green taxation is one of the
highest in the &4%+ area. 4nvironmental taxes, as discussed in the following, refer to taxes with
an explicit environmental purpose (e.g. %& ' and sulphur taxes).
Box 1. Environmental taxes in Norway main developments
191 *ulphur tax on mineral oil
19-"1993 Tax on non"refillable beverage containers (replaced by broader taxation of
beverage pac,aging)
19#1" 3etrol tax differentiated according to lead content
19##"199# Tax on nitrogen and phosphor in mineral fertilisers
199#" Tax on pesticides, tax on lubricating oil
199$"1991 Tax on environment damaging batteries (replaced by regulation)
1991" %& ' tax on petrol, auto diesel oil, mineral oil (excl. fisheries etc.), and
petroleum sector (only offshore activities)
199'"'$$' %& ' tax on coal and co,e, except most industrial processes
199-" 4nvironment tax on beverage pac,aging differentiated according to return
rate
1999"'$$1 *ulphur tax on coal, co,e and oil refineries at a low rate (replaced by
voluntary agreement)
1999" Tax on final waste treatment. %& ' tax includes domestic sea transport of
goods (formerly only passenger transport) and the supply fleet
'$$$" Tax on environment and health damaging chemical products (only two
products so far), beverage pac,aging tax differentiated according to
materials, auto diesel oil tax differentiated according to sulphur content,
annual weight"based tax on heavy vehicles differentiated according to
emission standards (456&/7456&///)
'$$3" Taxes on !8%s and 38%s
Note9 :ears fully or partly in operation. *ource9 ;inistry of 8inance.
5se of environmental taxes has been assessed and evaluated by a number of official commissions.
Already in 19 the 2overnment appointed a preparatory committee to study possibilities of using
emission charges and ma,e proposals for environmental taxes, which submitted an official report
in 19#' ( NOU 1982: 23 <4mission %harges=). The committee found limited scope for replacing
regulation by taxes, especially as variations in recipients re0uired ad>ustment of measures to local
conditions. According to the committee, taxes could supplement regulations in abating only certain
emissions with a more general environmental impact, *& ' in particular. These views are reflected
in the following 2overnment long"term programme, St.meld. nr. 83 (19841985) <the Norwegian
?ong"Term 3rogramme 19#1719#9=. The 2overnment could not advocate use of emission charges
as a general instrument in environmental policy. !owever, the ;inistry of the 4nvironment would
consider possibilities for a more limited use of emission charges.
@y the end of the 19#$s the 2overnmentAs opinion on the use of environmental taxation had
become mar,edly more positive. /n the next long"term programme, St.meld. nr. 4 (19881989)
<the Norwegian ?ong"Term 3rogramme 199$71993=, environmental taxes are seen as a means for
improving resource allocation in the economy. The 2overnment envisaged that increased revenue
from environmental taxation could be used for reducing other taxes. At the end of 19#9 the
2overnment appointed a preparatory committee to prepare a basis for decision"ma,ing concerning
the use of economic instruments in environmental policy in the 199$s, the <4nvironmental Tax
%ommission=. /n its report, NOU 1992: 3 <Towards more %ost"effective 4nvironmental policies in
the 199$s=, the %ommission advocated the gradual development of a comprehensive and cost"
effective system for pricing of fossil fuel emissions. The %ommission noticed that -$ per cent of %&
' emissions and 1$ per cent of *& ' emissions were exempt from taxation. /t also criticised the
wea, correspondence between the %& ' tax rate and the carbon content of different fuels. The %& '
tax should in principle be applied at the same rate for emissions from all fossil fuels and uses.
!owever, costs of restructuring in industries and adaptation in local communities should be
considered when introducing and increasing %& ' taxation.
/n 199', as a follow up of the 4nvironmental Tax %ommission, the ;inistry of the 4nvironment
appointed a preparatory committee on environmental policy instruments. 4specially the use of
administrative regulations is assessed in its report, NOU 1995: 4 </nstruments in 4nvironmental
3olicy=. The committee found the concession system of licensing industrial plants (individual
emission permits) had wor,ed well in reducing local pollution from industrial emissions. !owever,
the committee advised the environmental authorities to consider possibilities of simplification and
increased flexibility of licensing. The committee assessed possible alternatives to the concession
system9 4nvironmental taxes, tradable emission 0uotas, legislation (general rules), voluntary
agreements, and environmental 0uality standards. /t advised continued use of the concession
system for most local pollution from industrial sources. %oncerning regional and global
environmental problems, however, the committee recommended the use of general instruments,
i.e. economic instruments or general regulation, in preference to individual permits.
/n 199- the *torting as,ed for the establishment of a preparatory committee to assess taxation as
an instrument for both improving the environment and increasing employment. The 2reen Tax
%ommission was appointed late in the year, and assessed how to change the tax system away from
taxation on labour and towards activities that imply increased use of resources and harmful
emissions in a long term perspective. /n its report, NOU 1996: 9 <2reen taxes 7 policies for a
better environment and high employment= the %ommission recommends a large number of
changes and increases over a broad range of environmental and energy taxes, a main motive
being to transfer well established principles of cost"effectiveness into practical policies for a better
environment and high employment.
The %ommission assumed that cost efficiency is a fundamental principle in the formulation of
climate policy. This means that policies should be formulated in a cost efficient manner across
greenhouse gases (2!2s), sectors and countries. /n the case of %& ' emissions, this means that all
products.uses of fossil fuels in principle should bear the same tax per unit emission in all countries.
The %ommission admitted that it will be difficult in the short run to ensure an optimal policy
structure across countries. Norwegian %& ' taxes should therefore be considered as an element of
NorwayAs role as an instigator in the area of climate policy. This complicates the tas, of formulating
a cost efficient structure of %& ' taxes in Norway. The level of taxation must therefore be
determined on a more pragmatic basis, in which the re0uirements of the instigator role are
weighted against the costs for Norway of being the pioneer in this area. The ma>ority of the
%ommission proposed a low %& ' tax rate for fuels and sectors that were exempted, while a
minority opposed any expansion of the %& ' tax.
&ther proposals (by a ma>ority) to be introduced in the short run, were inter alia a low *& ' tax
rate for uses and products that were exempted, harmonisation of fuel taxes and sales taxes on
vehicles, pea,"load pricing of road tolls, and reduction of government expenditure and subsidies on
environmentally harmful activities. 6evenue increases should be used to reduce employersA social
security contributions (pay"roll tax) or for other measures that will ease ad>ustment and structural
problems in the labour mar,et. The %ommission also proposed measures re0uiring further
elaboration, including inter alia tax on residual treatment of waste and taxes on substances
haBardous to health and environment.
/n the 3roposition no. C- (1997199#) <2reen Taxes=, the 2overnment proposed eliminating nearly
all exemptions from %& ' and *& ' taxes. !owever, %& ' tax on process emissions would be fully
compensated based on past emission intensities for each product (i.e. reduced specific emissions
would increase relative compensation). Net revenue after the compensation scheme, would be
used to reduce employersA social security contributions. Dhile the *torting approved a general
expansion of the *& ' tax, the %& ' tax was extended only to air transport (later withdrawn due to
international air transport agreements), domestic sea transport of goods, and the supply fleet in
the North *ea, leaving %& ' emissions from most processing industries and fisheries untaxed as
before. The *torting endorsed most other proposals, inter alia tax on waste delivered to landfills or
combustion plants, and removing exemptions from fuel taxes. The *torting also re0uired the
2overnment to appoint an official commission to assess a system for domestic 2!2 emissions
trading, ta,ing the Eyoto 3rotocol as the point of departure. The 3arliament emphasised that the
system at least should include manufacturing industries that are exempted from %& ' tax.
As a further follow up of the 2reen Tax %ommission, tax on health and environment damaging
chemicals were introduced in '$$$, so far comprising only trichloroethene and tetrachloroethene.
The *& ' tax on coal, co,e and refineries was removed in the '$$' budget. The ferroalloys and
carbide industries have especially high *& ' emissions, and subse0uently bore most of the tax
burden. None of these plants installed scrubbers in the two years the tax existed, but there was
some use of less sulphurous coal. A letter of intent between The ;inistry of 4nvironment and the
8ederation of 3rocess /ndustries (3/?) stipulates further reduction of *& ' emission in processing
industries till '$1$.
As an ad>ustment towards more rigid state aid rules determined by the 48TA *urveillance Authority
(4*A), the %& ' tax on coal and co,e was abolished from 1 Fanuary '$$3. *ubse0uently the %& '
tax only covers the use of petrol, auto diesel oil and mineral oil (except fisheries), and %& '
emissions from offshore petroleum activities.
&n 1 Fanuary '$$3 taxes on the greenhouse gases !8%s (hydrofluorcarbons) and 38%s
(perfluorcarbons) are introduced. The tax rates are around 1#$ N&E per tonne %& ' e0uivalents.
/n the '$$C budget the 2overnment proposes some tax changes with environmental effects,
hereunder abolish the exemption from annual weight"based vehicle tax for buses on licensed
routes. This will increase revenue by about N&E -C million accrued.
4xpand the environmental differentiation of the annual weight"based vehicle tax for vehicles in
excess of '$ tonnes to also include 45 emission re0uirements to be introduced during the course
of '$$C and '$$#. The change is expected to increase revenue by about N&E 1C million accrued.
4mission"free hydrogen cars to be exempted from vehicle registration tax and annual vehicle tax.
+uring the autumn '$$C the 2overnment has also proposed a trading system with allowances of
%&' gas emissions. The system is similar to the 4uropean system, but emissions witch are covered
by the %&'"tax is exempted. Together with the greenhouse"tax these mechanisms will cover about
$ pct. of NorwayAs total greenhouse gases.
The Nordic %ouncil of ;inisters has financed a report on green taxes in the Nordic countries, which
contains summaries of most studies and evaluations by 1999, see <An 4valuation of the /mpact of
2reen Taxes in the Nordic %ountries=. http9..www.norden.org.pub.eboo,.'$$1"C11.pdf