Obituary for Norwegian ecological tax reform

Expert group suggests fiscal measures to decline in favour of economic instruments

Although environmental taxation has been strongly supported by successive Norwegian governments for the better part of 30 years, a broad programme of ecological tax reform in Norway has "never got off the ground" and is beginning to look like "a declining policy instrument," according to a new report by the Oslo-based Centre for International Climate and Environmental Research (Cicero).

The Kyoto protocol in particular has strengthened interest in a system of tradable emission quotas as an alternative to green taxes "contrary to recent developments in several other European countries such as the United Kingdom, Germany, and the Netherlands".

Green taxes were first mooted in the wake of the 1972 UN Stockholm conference, when several government reports recommended them as a constructive variation of the "polluter pays" principle.

The idea of ecological tax reform as such, the Cicero report continues, surfaced during the eighties, with the argument that "green taxes would make reductions in other taxes possible". In the nineties, despite the best efforts of a Green Tax Commission and a short-lived coalition government of the more environment-friendly parties, "the tax discussion boiled down to whether or not all polluters would pay the same carbon tax".

The report concludes that "the political foundation for a green tax reform was...never in place". In fact, "one of the most important consequences of the Green Tax Commission's work is perhaps a new focus on alternative environmental policy instruments," and in particular emissions trading.

Follow Up:
Cicero, tel: +47 22 85 87 50. The report is entitled "From taxes to permits? The Norwegian climate policy debate", reference 2000:6.

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