Implementing environmental taxes: best practice and lessons learnt
As the world grapples with escalating environmental challenges, the imperative for effective environmental taxation has become more pronounced. The concept of environmental taxation gained prominence in the late 20th century with growing concerns about environmental degradation, pollution, and resource depletion, among others. The proposal for environmental taxation is based on the belief that traditional regulatory approaches alone might not be sufficient to address complex environmental challenges. Over the last two decades, the adoption of international agreements such as the Kyoto Protocol (1992) and the Paris Agreement (2015) has catalysed discussions and initiatives aimed at incentivising environmental protection. These agreements have played a pivotal role in shaping global efforts to utilize economic tools as part of a comprehensive approach to combating climate change. Consequently, numerous countries have integrated environmental taxes and other market-based instruments into their overarching strategies to tackle environmental issues and foster sustainable development. The adoption of environmental taxation reflects a paradigm shift towards recognising the economic dimensions of environmental preservation and underscores the global commitment to mitigating the impact of human activities on the planet.
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