Green taxation theory in practice

Abstract

In light of the increasing focus on Greenhouse Gases (GHG), this article seeks to put green tax theory into practice by analysing the 2012 reforms of the Carbon Reduction Commitment (CRC). It is a scheme that targets high carbon-emitting organisations which do not fall within either the European Emissions Trading Scheme or the Climate Change Agreements. It is a scheme, therefore, that fills an important lacuna in the emissions reducing toolbox. Little academic attention has been spent considering the CRC, which started in 2010 and which has been accused of being an administrative burden on both participants and the regulator. The CRC has received extensive scrutiny from industry following a consultation in 2012 which proposed the simplifying reforms. The article considers both the principles of effective taxation, alongside a narrower study of effective green taxation and in doing so outlines four factors of an effective emissions tax: comprehensiveness, certainty of emissions reduction, flexibility and administrative costs. It is using these four factors that the author conducts a deep and thick analysis of the reforms, using a cost-benefit analysis approach, in order to determine whether the CRC has become a more efficient environmental tax.