Environmental taxation and its possible application in Australia

Abstract

This paper explores the potential use of environmental taxes in Australia in addition to the broad based and larger revenue raising taxes on income, consumption and assets. Environmental taxes are one of the available policy intervention instruments for correcting market failures with the allocation of and investment decisions for the environment. Effective environmental taxes provide national efficiency gains, with the revenue primarily as a welcome by-product. Potential environmental taxes and of reforms to current taxes include specific taxes for pollution external costs, subsidies for activities providing external benefits, taxes and other measures to reduce urban congestion, reform of taxes to capture resource rents, and the possibility of taxes on private good uses of environmental resources which have alternative public good or common pool properties. More papers from this conference available at: Melbourne Institute – Australia’s Future Tax and Transfer Policy Conference Progra