1. Regional Environmental Taxes in Spain Joint CAFE/NEBEI Conference.
Regional Environmental Taxes in Spain
Xavier Labandeira
rede and Department of Applied Economics
Universidade de Vigo
Joint CAFE/NEBEI Conference
Brussels, November 2004 1

2. Regional Environmental Taxes in Spain Xavier Labandeira
CONTENTS
1. Background
1.1. Environmental context
1.2. Tax assignment rules
1.3. Regional environmental taxes
2. The Galician tax on air pollution
2.1. Design and implementation
2.2. Effects
2.3. Assessment
3. The future 2

3. Regional Environmental Taxes in Spain Xavier Labandeira
1. Background
● Environmental context
a) Important environmental problems of different types and scope
b) In some cases with “unbalanced” distribution
c) Institutional share of environmental policies
d) Scarce use of economic instruments
► Background
The Galician tax
on air pollution
The future 3

4. Regional Environmental Taxes in Spain Xavier Labandeira
Selected regional emissions in 2000
► Background
The Galician tax
on air pollution
The future 4

5. Regional Environmental Taxes in Spain Xavier Labandeira
● Tax assignment rules
a) A history of limited regional autonomy on revenue sources
b) Regional taxes cannot be levied on bases already taxed by central and local administrations
c) Environmental taxes are thus one of the few alternatives available to regional authorities to increase funding
► Background
The Galician tax
on air pollution
The future 5

6. Regional Environmental Taxes in Spain Xavier Labandeira
a) Regions are increasingly active in the field
b) A gradual approach: taxes on water pollution (1980s), air pollution (1990s) and waste (2000s)
c) Taxes on water pollution get most environmental revenues but they represent very little in regional receipts
d) In most cases the central government attempts to block regional developments
► Background
The Galician tax
on air pollution
The future 6

7. Regional Environmental Taxes in Spain Xavier Labandeira
► Background
The Galician tax
on air pollution
The future 7

8. Regional Environmental Taxes in Spain Xavier Labandeira
Regional (own) tax revenues, 2002
► Background
The Galician tax
on air pollution
The future 8

9. Regional Environmental Taxes in Spain Xavier Labandeira
► Background
The Galician tax
on air pollution
The future 9

10. Regional Environmental Taxes in Spain Xavier Labandeira
2. The Galician tax on air pollution
● Design and implementation
a) Legal object:
In theory environmental correction...
b) Tax base:
Emission of Oxides of Nitrogen and Sulphur,
through direct or indirect estimation
Background
► The Galician tax
on air pollution
The future
1010

11. Regional Environmental Taxes in Spain Xavier Labandeira
● Design and implementation
c) Tax rates:
ton/year 0€/ton
ton/year 33€/ton
ton/year 36€/ton
more than ton/year 42€/ton
d) Revenues:
Earmarked to environmental protection and to a special regional fund to deal with environmental catastrophes
Background
► The Galician tax
on air pollution
The future
1111

12. Regional Environmental Taxes in Spain Xavier Labandeira
Background
► The Galician tax
on air pollution
The future
1212

13. Regional Environmental Taxes in Spain Xavier Labandeira
● Effects
a) Emissions
b) Electricity prices
c) Revenues
d) Location decisions
Background
► The Galician tax
on air pollution
The future
1313

14. Effects on electricity prices, 1999
La tributación propia: especial mención a la fiscalidad ambiental Xavier Labandeira
Effects on electricity prices, 1999
Background
► The Galician tax
on air pollution
The future
1414

15. Regional Environmental Taxes in Spain Xavier Labandeira
● Assessment
a) A brief history
b) A good jurisdictional assignment?
c) Tax rates: levels and structure
d) Very few taxpayers
e) Tax administration
Background
► The Galician tax
on air pollution
The future
1515

16. 4. The future a) Expected developments in Galicia
La tributación propia: especial mención a la fiscalidad ambiental Xavier Labandeira
4. The future
a) Expected developments in Galicia
b) Actual developments outside Galicia
Andalusia
Castilla La Mancha
c) Conclusions
Background
The Galician tax
on air pollution
► The future
1616