Environmental taxes - a fiscal response to the environmental issues
2011
Jevđović, Gordana
Our environment has been under attack since the industrial age began. Thus, the global community is today facing great challenges in dealing with environmental issues such as climate change, global warming, water pollution and ecological degradation. Market forces alone are not enough to solve these problems, hence the adequate government action is essential. Taxes can play a contributing role in the overall solutions, alone or in complement to other instruments and regulatory measures. Getting a healthier environment by taxing pollution is not a new idea. However, during recent years it seems to be getting serious attention throughout the world. Basic functions of environmental taxes are to provide incentives both for polluters to correct their harmful behaviour and for consumers to use less of the taxed product, as well as to raise funds for the government budget which may be used to improve environmental expenditures. In addition, putting a price on pollution encourages innovation, because producers are motivated to find a more environmentally-friendly way of doing business.
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