No. 14 - August 2011
Tax Thematic Series
INTRODUCTION We are confronted with one of the greatest challenges of this century posed to humanity; the global climatic change is increasing mean temperatures, altering rainfall patterns, raising the sea level, reducing the surface covered by snow and glaciers, etc. An international mitigation strategy is required that considers the magnitude of the economic costs implied and is related to the characteristics and alternatives of economic development in the next decades. 1 Given the environmental deterioration occurred in the last years, the lack of environmental information available to the citizens and a lack of effectiveness of the regulatory mechanisms used to protect the ecosystem, it should be analyzed whether the implementation of environmental taxes is apt to preserve the existing resources and overcome the problems generated in the environment within a tax system that adopts them. 1. ECONOMIC AND SUSTAINABLE DEVELOPMENT The Bruntland Report of the World Commission on Environment and Development (1987) incorporates the concept of sustainable development, which is such development that meets the present needs without compromising the ability of future generations to satisfy their own needs. The guidelines set out in such report are the following: • • • •
The pace for extracting renewable resources should always be less than the pace of natural regeneration. The waste flow should be kept below or on the same level as the assimilation capacity of the environment. The reduction in non-renewable resource inventory should be offset by an increase in renewable resources. The reduction in non-renewable resource inventory should convey an increasing efficiency of use.
This report further outlines two more concepts: intra-generational and intergenerational equity. 2 On the issue of dealing with environmental problems a reference is made to the preservation of the rights and interests of future generations; but a problem that is to be discussed today, for it is one faced by current generations, is the social exclusion suffered in our planet. 3
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On this regard, the ECLAC believes that in the 21st Century the economies in Latin America and the Caribbean will be confronted with the challenge imposed by the climatic change, including the costs of adaptation and mitigation, while simultaneously deal with other pending issues, such as sustainable economic growth, job generation or poverty reduction. In “The economy of climatic change in Latin America and the Caribbean, 2009 Synthesis”, United Nations, Economic Commission for Latin America, 2009, p. 9. On this issue, Garnica indicates that intra-generational equity is the fair distribution of both environmental income and costs, which leads to plan the redistribution of income and costs among a country’s population; whereas intergenerational equity is the fair distribution of environmental income and expenses among present and future generations. In Garnica, Juan F. “Tributos orientados a la protección del medio ambiente”, Doctrina Tributaria Errepar, Volume XXVI, July 2005. Fazio, Horacio, “Racionalidad Económica, ética ambiental y generaciones futuras”, in “Ambiente, economía y sociedad”, FLACSOLIBRONAUTA, Buenos Aires, 2001.
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Edgardo H. Ferré Olive (Argentina)
Tax Administration/Social Role