Raising green taxes to plug the growing deficit in public finances – instead of conventional taxes – would create several hundred thousand additional jobs in the UK, according to a new report from the UK Green Fiscal Commission [1]. Many of these jobs would be created in Scotland.

Such a tax shift would also save millions of tonnes of greenhouse gas emissions, delivering UK climate targets for a 34% emissions reduction [2].
 
The Commission’s report suggests that to win public support for a green tax reform, Government needs to guarantee compensation for potential impacts on poorer groups, such as paying to insulate the homes of those in fuel poverty. It also concludes that by earmarking just a tenth of the revenues of a green tax reform for improving homes, subsidising electric vehicles and supporting renewable energy development, emissions reductions across the UK could be come close to 42% by 2020 [3].
 
Duncan McLaren, Chief Executive of Friends of the Earth Scotland was one of the members of the Green Fiscal Commission. He said: “Scotland could benefit greatly from such a reform package, both environmentally and economically, with disproportionate spending on insulating homes and developing new renewables likely to be needed here. Scotland’s politicians, in both Westminster and Holyrood, should get behind the Commission’s proposals and lead the campaign for a greener, fairer tax system.”
 
ENDS
 
Press Contacts:            Per Fischer 0131-243 2715
                                       
 
 
Notes to Editors
 
1. The GFC’s report ‘The Case for Green Fiscal Reform’ is being launched by Lord Adair Turner party representatives at Westminster on Monday 26th October. New and detailed research conducted for the Commission suggests that the UK would have 455,000 more people in employment in 2020 with a Green Fiscal Reform than without.
 
2. The report concludes that:
GFR is a key policy to get the UK on a low-carbon trajectory; it will help develop the new industries that will provide competitive advantage; and contribute to restoring fiscal stability after the recession.
Environmental taxes work to cut environmental impacts.
Environmental taxes are efficient.
Environmental taxes can raise large stable revenues allowing other taxes to be lower than they would otherwise need to be.
The public can be won round to support environmental taxes as alternatives to other taxes (green fiscal reform (GFR)).
The UK and Scotland’s 2020 greenhouse gas targets could be more easily met with GFR as a part of the policy package.
GFR could stimulate additional employment and investment in the low-carbon industries of the future.
GFR can dull the impact of high world energy prices on the economy.
Any impacts of GFR on competitiveness can be mitigated.
Low-income households need to be protected from energy price rises while their homes are being made energy efficient.
 
3. Emissions reductions at this level would deliver the Scottish Government’s world-leading climate targets for 2020.
 
4. The text of the GFC’s own press release follows:

Definitive study shows a green tax shift would allow government to deliver economic as well as environmental benefits

London, October 24, 2009 – A comprehensive study by the Green Fiscal Commission has revealed that a ‘polluter pays’ tax shift would provide a significant boost for UK low-carbon jobs and competitiveness.

The study, a result of over two years of research, shows that higher green taxes, implemented as a tax shift, could by themselves enable the UK to meet its statutory carbon emission reduction targets.  The tax would also provide a boost to the development of low carbon industries and, in doing so, provide additional employment.
“This is not just about reducing emissions, but helping the UK to develop low-carbon competitiveness,” said Green Fiscal Commission Director Paul Ekins. “This work suggests that it is possible to substantially reduce emissions and create jobs, which has to be an important message to policy makers at a time of rising unemployment. We know that a tax shift can be attractive to people, because it is effectively taxing a social evil, i.e.: pollution, and people are much more supportive of taxes levied in this way.” With Gordon Brown looking to show the UK’s green credentials and needing to find ways to stem UK unemployment, a green tax would help on both fronts.
Highlights of the report include:
·      Environmental taxes do protect the environment and in many cases will produce improvements at lower cost than other measures
·     Raising environmental taxes will not only produce a cleaner environment but allow other taxes to be lower
·      A poll for the Green Fiscal Commission showed clear public support for a green tax shift.

·      The UK’s 2020 greenhouse gas targets could be met with green taxes and the economic implications would be broadly neutral
·      Investing a small proportion of the revenues from increased green taxes in energy-efficient homes, cars and renewable energy schemes would reduce emissions further at effectively no cost

Speaking just before the launch of the report, Robert Napier, Green Fiscal Commission chairman said, “This report adds the numbers to an issue that has frequently been discussed in more general terms. It shows that Green Fiscal Reform could help put the UK on a low-carbon track and from that many positives will flow: reduced greenhouse gas emissions, extra employment, and new technologies which will help the UK economy all round.”
 
The Green Fiscal Commission was formed in May 2007 and will continue in existence to the next General Election. It is an independent body and is not affiliated to any political party or government. Its members come from business, universities, the three main UK political parties, both Houses of Parliament, and consumer and environmental organisations. Members were all appointed in a personal capacity. The Commission’s secretariat is provided by the Policy Studies Institute (PSI), one of the UK’s leading policy-focused research institutes. Its Chairman is Robert Napier, Chairman of the Homes and Communities Agency and the Board of the Met Office, with a distinguished career in business and the environment. Its Director is Professor Paul Ekins, formerly Head of the Environment Group at PSI, but now Professor of Energy and Environment Policy at the UCL Energy Institute, University College London.
The Commission’s full Terms of Reference and a list of members are available by contacting Francesca Polini at Francesca@wecare.eu.com or on 07725558754.