10 December 2013

Green taxes that are not so green

After several years, we've finally published our paper

Schuerhoff, Marianne, David Zetland and Hans-Peter Weikard (2013). "The life and death of the Dutch groundwater tax" Water Policy 15(6):1064-1077. [pdf]

Abstract: We examine the Dutch national groundwater tax (GWT) --- a "win-win-win green tax" that promised to simultaneously provide revenue to government, reduce the relative burden of other taxes on productive behaviour (e.g., income tax), and improve environmental outcomes. We find that the GWT generated revenue without having a noticeable impact on production incentives or environmental health. Although the GWT is often cited as an example of environmental economics in action, it was neither designed, implemented nor operated in accordance with environmental goals. In many ways, the GWT was just another source of revenue --- and one that bothered special interests. The Dutch government revoked the "inefficient" GWT on December 31 2011.

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