October 7, 2022

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National Bank sees 'big room' for better carbon dioxide taxes |  the interior

National Bank sees ‘big room’ for better carbon dioxide taxes | the interior

In Belgium ‘there is still plenty of room’ for CO2 taxes more effectively. This was stated by the National Bank in an analysis published on Wednesday. “Additional government action is needed because current climate policies are insufficient,” the book states.

In its analysis, the National Bank takes a closer look at Belgium’s fiscal policy to see how it can be used to achieve climate targets imposed by the European Union.

To achieve targets for reducing greenhouse gas emissions, she said, “additional government action is needed because current climate policies are insufficient.”

ko2Emissions from industry are hardly taxed

There is no direct carbon tax in Belgium, so the National Bank has indirectly calculated the extent of carbon dioxide2 Taxable. It turns out that emissions from industry are hardly taxed, which means that Belgium is at an all-time low compared to thirteen other countries in Western Europe.

Our country is limited to taxing CO2 In industry it only relates to the European Emissions Trading System (EU ETS). Also for heating homes and businesses, Belgium’s implied CO2 rates are among the lowest in Europe.

Taxes on road transport emissions are relatively high

Taxes on road transport emissions are relatively high in Belgium. “But the resulting price signal is distorted due to the preferential tax treatment of the company’s cars,” assures the National Bank. “In combination with the fuel card from the company, driving costs are determined entirely, so that the final polluter does not bear the pollution costs.”

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CO . National Bank Suggestions2tax emissions more effectively

To avoid uneven carbon dioxide load2In order to eliminate emissions, according to the Central Bank – “apart from the general tax shift towards environmental taxes” – it is advisable to make a tax shift in taxes on greenhouse gases. “This shift not only enhances the most efficient technologies to reduce emissions, but is also important to creating a level playing field that prevents free riding.”

The National Bank also advocates, among other things, a more calculated and efficient use of subsidies. “Effective use of subsidies also benefits from carbon tax neutrality. For example, subsidies for heat pumps that use electricity will become more efficient if the price of natural gas increases compared to the price of electricity,” the Foundation provides as an example.

When introducing carbon taxes and subsidies, it is important to ensure that they do not lead to redistribution problems, notes the National Bank. And it stated that “compensations for low-income groups, which are relatively affected by the rise in energy prices, are legitimate.” “However, it is preferable that this compensation take the form of a general income support that does not distort the price signal, nor of a support that lowers the price of energy.”