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Environment

Ensuring that polluters pay - toolkit

Taxes, charges and fees

Taxes, charges and fees

Environmental taxes, charges or fees add extra costs to the use of products or services that reflect the environmental harm they cause.

Tradable permits

Tradable permits

Trade permit schemes set a cap or quota for pollution in a given area, and only allow actors in that area to pollute according to the quantity of permits they hold.

Deposit refund schemes

Deposit refund schemes

Deposit refund schemes charge users an extra fee when they buy a product, which is refunded if the product packaging is returned for recycling or reuse.

Offsetting schemes

Offsetting schemes

In these schemes actors must compensate for environmental damage in one place by paying for equal or greater environmental restoration somewhere else.

Payments for ecosystem services

Payments for ecosystem services

A variety of arrangements through which financial incentives are offered to actors to encourage them to not cause environmental harm.

Environmental taxes in EU Member States

Myth-busting about polluter pays instruments

While there are many examples of economic instruments designed to make polluters pay in place across the EU, they still only contribute a minor share – less than 10% - of total government revenues in all the Member States.

This section provides evidence to dispel some common myths about green taxes and other forms of environmental economic instruments, that may be standing in the way of their wider adoption.

How can we better apply the Polluter Pays principle?

Recognising the partial implementation of the Polluter Pays principle, as identified by the European Court of Auditors Special Report 12/2021: The Polluter Pays Principle: Inconsistent application across EU environmental policies and actions (europa.eu), the Commission announced as part of its Zero Pollution Action Plan that it would undertake a fitness check (evaluation) of current implementation. This would allow the Commission to identify where the principle is well applied and where there is scope for further implementation. On the basis of the fitness check, in 2024 it would be able to make a recommendation on how to better implement the polluter pays principle. Information on the fitness check is available at Polluter Pays Principle – fitness check of its application to the environment (europa.eu).

The fitness check will take advantage of a wide range of evaluations and assessments of existing policy in relation to the principle. This is necessary because the principle applies to policies managing impacts on the environment (so affecting climate, air, soil, waste, biodiversity etc) including from different sectoral sources such as energy, agriculture and transport. The fitness check will take advantage of a wide range of evaluations both of specific policies and of cross cutting issues such as of environmental liability (see Environmental Liability (europa.eu)).

More information

You can read more about polluter pays instruments across the EU in the study “Green taxation and other economic instruments – Internalising environmental costs to make the polluter pay” by IEEP et al.

10 NOVEMBER 2021
Green taxation and other economic instruments – Internalising environmental costs to make the polluter pay - Study
English
(3.01 MB - PDF)
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10 NOVEMBER 2021
Green taxation and other economic instruments – Internalising environmental costs to make the polluter pay - Annexes
English
(3.56 MB - PDF)
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