Environmental Fiscal Reforms

2008 Strategy for Resource Mobilization

Strategic objective 2.4 - "To develop and implement economic incentives that are supportive of the Convention's three objectives at local and national levels, consistent and in harmony with the other relevant international obligations"

Strategic objective 4.3 - "To explore opportunities presented by environmental fiscal reforms including innovative taxation models and fiscal incentives for achieving the three objectives of the Convention"

Indicator:
"Resources mobilized from the removal, reform or phase-out of incentives, including subsidies, harmful to biodiversity, which could be used for the promotion of positive incentives, including but not limited to innovative financial mechanisms, that are consistent and in harmony with the Convention and other international obligations, taking into account national social and economic conditions;" --- Decision X/3, paragraph 7(13)

Status and trend
Environmental fiscal reform refers to a wide range of structural adjustments to a country’s fiscal system, particularly taxation models and fiscal incentives, which can reflect true values and importance of biodiversity and ecosystem services in national economies. Over 70 countries indicated that certain fiscal measures have been undertaken or planned. Sri Lank introduced environmental tax system into the 2008 budget proposals. Georgia tried to bring the budget law and tax law in line with environmental legislation. In the Netherlands, revenues from green taxes over the past 23 years quadrupled from 4.8 billion euros in 1987 to nearly 20 billion euros in 2010. In Philippines, the Gilutongan Island Marine Sanctuary (GIMS) in the Municipality of Cordova in Cebu generated about PhP 3.0 million in user fee income in 2008 compared to about PhP 550,000 in 2001. Tax exemptions for biodiversity-related objects and activities are observed in a large number of countries including Kenya and Myanmar. Norway undertook to reduce the environmental pressure caused by the consumption of goods and services by giving greater weight to environmental considerations in public procurement processes. In Brazil and Portugal, biodiversity has introduced into their indexes for calculating intergovernmental transfer to subnational governments.
37% of countries have some experience of mobilizing resources from reforming fiscal systems. There is still considerable fiscal space available for introducing fiscal measures in many countries and deepening existing environmental fiscal reforms that have proved successful.

  • United Nations
  • United Nations Environment Programme