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Environmental fiscal reform potential for the EU-28: Approach to political feasibility assessment and questionnaire

Patrick ten Brink, Senior Fellow and Head of IEEP Brussels Office With input from Sirini Withana and Jean-Pierre Schweitzer

7 September 2015

Expert Group Meeting on Greening the European Semester, Brussels

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Aim:

• Assess political feasibility of initiating suggested EFRs in each MS (scale of revenues?, over what timescale?)

• Take into account specific social, economic and environmental considerations in each MS

• Identify the key obstacles to EFR in each MS

• Provide insights for future CSRs

Approach

• Identify key experts/MS representatives

• Design and disseminate a questionnaire

• Conduct interviews / assess written responses

• Develop a summary for each MS and EU-wide synthesis

Introduction to the feasibility study

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• Assessment of feasibility is inherently difficult and complex

• Subjective judgement, hence answer will vary depending on who is asked

• Longer time frames could help respondents to go beyond current political positions

• Complement with project team (including national experts) insights from detailed assessment of EFR for each MS

Challenges of assessing political feasibility

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Overview of scope and potential for EFR (provisional illustrative rankings – to be developed from responses)

Governance level Drivers Barriers Conclusion

Tax*

L/R N EU INT Enviro. Econ/fin. Social Other Political Public opp.

Comp./ cross-border

Other Feasibility of reform

Realistic timescale

Semester recommendation?

Light fuel oil * $$$ xxx xxx xx ? 2022/30 ? Yes (ETD)

LPG * $$ xx xx x x - 2022? ?

Kerosene ** $$ ** xx xx + 2022 ?

Vehicle circulation

tax ** $ xx x x + 2022

Yes (climate, air quality)

Passenger aviation

*** $$ xxx xxx xxx --- 2030 ?

Landfill () *** $$/$$$ ** x x x x +++ 2017 Yes (Waste FD)

Aggregates ** $ ** xx x ++ 2022 ?

Air pollution

() *** $$ *** xx xx + 2022 Yes (Air quality

directive)

Pesticides () *** $ *** xx x + 2022 Yes (Water FD?)

Plastic bags () *** $ x x +++ 2017 Yes

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State of play with the questionnaire

• Questionnaire has been sent to MS experts

• Based on a common template

• Tailored to reflect results of EFR assessment (i.e. revenue potential, ramp-up rates) for each MS

• Focus on 10 most important EFRs (by revenue)

• Deadline for responses: 18th September 2015

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Questions 1-3: Member state experiences in EFR

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Questions 4-5: Obstacles to EFR in the MS & how they can be overcome

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• Table 1 sets out how top 10 [transport/ pollution and resource] tax rates could be increased over time.

• Ask MS for the year these reforms could be initiated

Q6: Feasibility of reforms (transport/pollution & resources)

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• Team is updating good practice benchmarks for energy, thus question seeks to gather responses on general energy tax reforms

Questions 7: Feasibility of general energy tax reforms

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Questions 8-9: Other areas and visions for reform

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MS inputs:

1. Written response to the questionnaire

2. Interview– in person (i.e. after Brussels meeting, Hague workshop) or via telephone

3. Provide further contacts who can provide further insights (esp. finance ministries)

Deadline for response: 18th September

Synthesis Report:

• Based on the response to the questionnaire the study team will develop an assessment of the political feasibility in the EU28

• The results will be presented in the main report

Next steps

www.ieep.eu

@IEEP_eu

Patrick ten Brink - ptenbrink@ieep.eu

Jean-Pierre Schweitzer - jpschweitzer@ieep.eu

Sirini Withana - swithana@ieep.eu

IEEP is an independent, not-for-profit institute dedicated to the analysis, understanding and promotion of policies for a sustainable environment.

Thank you for your attention