Danish "wise men" back high fuel taxes

Economic Council chairmen advise against cuts, call for fertiliser tax to be introduced

Denmark should resist any temptation to follow other EU countries by reducing fuel taxes the chairmen of the Danish Economic Council have advised. In their latest six-monthly economic report, the so-called "three wise men" say that higher oil prices will help Denmark meet its carbon dioxide and other environmental goals. Any tax cuts would likely benefit oil producing states rather than consumers.

The group also calls on the government to introduce new taxes on artificial fertilisers and fodder to cut nitrogen discharges. This is one of the major policy issues facing agriculture, they say. Though a 1991 action plan called for a 50% reduction in nitrogen discharges from 1985 levels, the goal has not been achieved. The tax proposal could be extended through a deposit/refund system to compensate farmers for the amount of nitrogen contained in final products, the group adds.

The Danish government came close to introducing fertiliser taxes four years ago (ENDS Daily 3 December 1997). The OECD recently urged it to reconsider, noting that agricultural pollution targets had not been met (ENDS Daily 26 June).

In a review of Danish policies on biodiversity and its management, the group finds several deficiencies in the administrative and legal framework, including poor allocation of resources and too little being spent on improving decision making. Not every species is protected, it concludes, and especially not those that are threatened.

Follow Up:
Danish Economic Council, tel: +45 33 13 51 28, and English language report summary.

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