Ecological Tax Reform, an Example that Promotes Social Progress and Sustainable Development

In view of rising food and energy prices with impacts on vulnerable groups of society, the European Commission (DG Employment) convened a conference in Brussels on 24 February 2009 on social impacts of sustainable development, and policies aimed at making production and consumption more sustainable.  R. Andreas Kraemer of Ecologic Institute presented the success case of the German ecological tax reform, which creates jobs, helps stabilise social security systems, and induces improvements in energy efficiency and structural change.

The German ecological tax reform increases taxes on energy (petrol or gasoline, diesel, electricity, heating fuel, gas) and recycles much of the revenue to support social security (old age pensions), in effect lowering labour costs and stimulating employment.  The case demonstrates how taxes can encourage more energy efficient consumption, discourage pollution and stimulate employment with measures ensuring the poor are not disproportionately impacted. A Brief on the German Ecological Tax Reform [pdf, 65 KB, English] is available for download.

Further Links:

• Ecologic Institute Project: Energy taxes in Europe
• Ecologic Institute Project: Effects of Germany's Ecological Tax Reforms
• Press: Ecotax has a positive effect
• Ecologic Institute Project: Job Creation Potential of Clean Technologies