There are currently hundreds of taxes throughout the European Union that are intended to be “environmental”.
These taxes force European companies to bear very significant compliance costs - analyzing the tax rules, collecting the necessary information and filing tax returns. However, for a number of reasons, they are inefficient.
First, the revenue collected by the Member States is very low.
Furthermore, as the taxes differ in each Member State (and, in many cases, including Spain, in each region), they discourage some European companies from expanding their operations to other Member States or regions. They also damage the competitiveness of European industry, as environmental taxes are generally imposed on activities carried out in the relevant European territory (rather than on imports from outside the EU) and do not incentivise exports.
Finally, and most importantly, it is doubtful that these domestic environmental taxes successfully achieve their desired goal of protecting the environment through a significant reduction of the global pollution and waste generated. The atmosphere and oceans are globally inter-connected and should be protected on a global basis (for example, CO2 emissions have the same impact on the atmosphere irrespective of the country where they are generated).
All these problems could be better managed within Europe at least if the European Union designed and approved a Directive (similar to the Excise Duty Directive) creating harmonized environmental taxes on the pollution and waste generated by economic activities.
These new taxes could replace all current domestic-based environmental taxes and apply neutrally. This would mean granting exemptions in connection with the pollution or waste generated in Europe on the production of products to be exported, but taxing any goods (and even services) imported into the European Union. This border-adjustment mechanism would create a “virtuous circle” of competitiveness for European companies (which would be able to operate throughout Europe with lower compliance costs), strengthening the European Single Market (eliminating entry barriers) and incentivising producers from all over the world to comply with international environmental standards (in order to be able to compete in the European market).
It is doubtful that these domestic environmental taxes successfully achieve their desired goal of protecting the environment.