A sustainable income: fiscal policies for a green economy

March 8, 2022
Global
Sustainability

Governments have always used fiscal policy to reshape and develop their economies. And as they seek to improve their nations’ environmental sustainability – mitigating climate change, while developing new growth industries – tax and subsidy regimes provide some of their most powerful tools.

Over recent years, for example, many countries have fostered radical changes in citizens’ and businesses’ behaviour by taxing harmful activities such as hydrocarbon fuel consumption, landfill waste disposal and city centre motoring, while cutting taxes on helpful investments such as electric cars. Meanwhile, subsidy regimes have dramatically boosted spending on emissions-reduction projects such as home insulation and renewable power generation.

As governments’ ambitions grow, civil service leaders and expert professionals are considering how to apply fiscal levers to a wider range of activities: carbon capture and storage, agriculture and conservation, for example. Equally importantly, some are thinking through how to withdraw the existing subsidies and tax reliefs supporting carbon-intensive activities while maintaining economic growth, helping workforces to adapt, and providing communities with new income streams.

As civil servants look to realise the goals agreed at COP26, this GGF panel discussion will explore how governments can use fiscal tools to reduce environmental harms and support research, investment and business growth in a new generation of sustainable industries.