Green taxes to plug fiscal deficit

According to Financial Services Authority chairman Adair Turner, environmental taxes need to be increased and more levies created, not only to drive the climate change agenda but also to answer the need for ways to meet the government’s targets of paying off the fiscal debt.

“If we have to raise taxes – and we will to some extent – we can deliberately design those to tax bad environmental things, like overuse of fossil fuels, rather than good welfare-enhancing things, like employment for people,” Lord Turner said in a recent interview with BBC Radio 4.

“There is a very strong argument whenever one is in the environment of tax rises for trying to make them skewed as much as possible to things that make sense in the long-term,” he added.

The idea is supported by the New Economics Foundation, the independent think tank that published the Green New Deal report. It highlights that taxes will be the only option left. However, Turner is more specific, commenting that environmental taxes should be employed.

The Guardian reported in late 2009 that Gordon Brown supports green taxes on aviation and shipping businesses, but that Alistair Darling may not be supportive.