Germany’s eco-tax was successful, but it has not been updated for 12 years. Environmental economists met in Berlin in September to discuss “ecological basic income.” Craig Morris reports. Regular readers of this blog will be familiar with Green Budget Germany (GBG), the organization behind some excellent studies on subsidies for conventional energy and industry electricity prices. The think tank was also behind Germany’s eco-tax, which was rolled out in annual increments from 1999-2003. The problem is that “the effect of the eco-tax is shrinking,” as Thomas Holzmann, vice president of the German Environmental Agency (UBA) stated at the meeting. Inflation is eating away at the tax, which is a flat fee charged per energy unit. By incentivizing lower fossil fuel consumption, the tax therefore gradually does away with itself if it is successful. For instance, after peaking at 18.7 billion euros in 2003, revenue from the eco-tax has fallen to just above 17 billion euros in previous years (source in German) – in absolute numbers, not adjusted for inflation. Klusmann, the new executive director of … Continue reading Low gas prices as opportunity for environmental taxation