Green Tax Shift—Taxing “Bads,” Not “Goods”
A major reason that strategies to support the transition to Clean Production are not being applied is the relatively low cost of materials and energy. The toxicity of materials and the lifespan of products are not reflected in their price. The resulting environmental pollution and healthcare costs of hazardous material use are not factored in to the price of the products they constitute.
At the same time, high labor costs in the Western world make labor-intensive product dismantling, repair, recycling, and reuse strategies prohibitively expensive. The economic model is currently distorted because it ‘overconsumes’ nature and ‘undervalues’ people, causing both unemployment and environmental destruction respectively.
In the past 25 years we have increased taxes on labor and income, and have maintained taxes on capital while allowing pollution and resource depletion to remain largely untaxed. The resulting tax system therefore encourages the “bads” of environmental degradation and discourages the “goods,” such as investments in ecological efficiency and labor. The growing movement to reverse this trend by shifting taxes is called Ecological Tax Reform or the Green Tax Shift.