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The government has predicted that total revenue from green taxes will more than double within four years, after publishing its first definition of the levies.
Projected figures compiled by the Office of Tax Simplification and issued by the Treasury show a significant growth from the £3.1bn raised in 2011/12, with £6.6bn being generated in 2015/16 by a combination of the climate change levy, the aggregates levy, landfill Tax, the EU emissions trading system, the carbon reduction commitment energy efficiency scheme, and carbon price support.
The official classification of green taxes is ‘designed to encourage effective policy making’ and will comprise the baseline against which the coalition will measure its commitment to increase the proportion of environmental tax revenue, the Treasury announced.
The department said each of the levies is explicitly linked to the government’s environmental objectives, has the primary objective of encouraging ‘environmentally positive behaviour change’, and is structured in relation to green objectives, meaning, for example, the more polluting the behaviour, the greater the amount charged.
Economic Secretary to the Treasury Chloe Smith claimed the official characterisation of environmental taxes will offer a ‘clear approach that delivers a positive environmental impact without adding burdens onto business or households’.
Ms Smith added, ‘The government will also continue to explore opportunities to further green the tax system through the course of the Parliament, in a way that is consistent with the aims of tax simplification and deficit reduction.’
