Brussels, 04/03/2014 (Agence Europe) - According to two studies published by the European Commission on Monday 3 March (on the DG environment website), a transition to greener taxes and increased flood protection could help economic growth. The results of these two studies will be taken into account during the European Semester, the economic policy coordination mechanism. These studies were published during the Environment Council's examination of greening of the European Semester as part of the Annual Growth Survey 2014 ( see other article).
Janez Potoènik, the European commissioner for the environment, said that “investing in flood protection can bring overall benefits to the economy, especially through nature-based solutions which are highly cost-effective. And environmental fiscal reforms have the potential to almost double the revenues they currently bring to national treasuries, with benefits for our environment as well as scope for cutting taxes on employment or cutting the deficit. That's a powerful argument for changing the status quo”.
On the basis of information from 12 member states, the first study suggests that moving taxes away from labour and towards pollution (increasing taxes on the causes of air and water pollution, for example) would bring in revenues of €35 billion in real terms in 2016, rising to €101 billion in 2025, with far higher figures involved if steps were also taken to remove environmentally harmful subsidies, explains the Commission. The potential revenues range from just over 1% of GDP per annum through to just over 2.5% of GDP per annum in 2025, depending on the member state concerned
The second study looks at various links between environment and economic policy, including the macro-economic impact of floods, best practices in supporting SMEs focusing on resource efficiency, and environmental expenditure in all member states. Investing in measures to reduce flooding is highly effective, on average costing some 6-8 times less than the damage caused by flooding. The approximate total cost of damage from flooding in the EU over the 2002-2013 period was at least €150 billion. Some of the benefits of investing in green infrastructure include restoring natural features to help manage and store flood water, which would include better outcomes for biodiversity and could help reduce construction costs, explains the Commission. (AN)