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Tax as a force for good ALIGNING TAX SYSTEMS WITH THE INCLUSIVE CIRCULAR ECONOMY

Femke Groothuis The Ex’tax Project www.ex-tax.com

Step 1: Integrated reporting

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Step 2: Value Extracted Tax (Ex’tax)

Labour taxes high: efficiency means fewer employees

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Natural resource taxes low: use unrestrained

In 2015, 35 OECD countries raised $14,377bn in taxes, of which: Labour taxes 52%

Green taxes 5%

PIT, SSC, payroll taxes

OECD (2018), ‘Dataset: Revenue Statistics - OECD countries: Comparative tables’ https://stats.oecd.org/Index. aspx?DataSetCode=REV. OECD (2018), ‘Environmental TaxaIon’. hLp://www.oecd.org/ env/tools-evaluaIon/environmentaltaxaIon.htm>.

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Environmental tax revenues decreasing

This diagram presents data from the OECD database for a selection of countries, for which consistent data is available throughout the 2000-2014 period. ACCA (2018) Tax as a force for good: rebalancing our tax systems to support a global economy fit for the future. Femke Groothuis.

https://www.accaglobal.com/gb/en/professional-insights/global-profession/environmental-tax.html

Global fossil fuel subsidies: $ 373 billion (2015) IEA/OECD

OECD (2018), OECD Companion to the Inventory of Support Measures for Fossil Fuels 2018, https://read.oecd-ilibrary.org/energy/oecd-companion-to-theinventory-of-support-measures-for-fossil-fuels-2018_9789264286061-en#page11, accessed 3 November 2018.

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Financial incentives aligned with the linear economy

Draining natural capital

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.. Abundance of human capital

Circular economy‌

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Labour-intensive business models TRAINING

REDESIGN OF PRODUCTS & SUPPLY CHAINS

SPARE PARTS HARVESTING

R&D REMANUFACTURING

REFURBISHMENT

RECYCLING

LEASE MODELS

REPAIR & MAINTENANCE SERVICES

Mining

Urban mining

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Re-use I-did slow fashion, Vera Claessen

Incineration

Products as a service

Bundles

Products

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Growth based on human capital instead of natural resources

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In practice (amongst others)

Netherlands

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Sweden (1990)

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Denmark (1993)

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Netherlands (1996, 2019)

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Finland (1997)

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Slovenia (1997)

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Germany (1999, 2007) UK (1996, 2001)

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British Columbia - Canada (2008)

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Colombia (2012).

EU

Finland

Global perspec5ve

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www.neweranewplan.com

Ex’tax Policy Toolkit EU study

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Ex’tax scenario EU-27 (2020)

Modelling results

EU27, 2016-2020, *Final energy consumption of 12 energy sources

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GDP + â‚Ź 842 billion

2016-2020, EU-27, compared to business as usual

Employment + 6.6 million

In 2020, EU-27, compared to business as usual

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Energy imports - € 27.7 billion

2016-2020 EU-27 savings on energy import bill, twelve energy sources

Integrated Value Added Statement

$ 1,389

(EU-27, 2016-2020 compared to baseline) (2016) The Ex’tax Project (scenario & design), Cambridge Econometrics (macro-economic modelling), Trucost (Value Added Statement).

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Aligning tax policy with the SDGs

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Carbon pricing

$82 billion market in 2018; 58% increase compared to 2017

IBRD/World Bank and ECOFYS (2018), State and Trends of Carbon Pricing 2018 <hOps://www.ecofys.com/files/files/worldbank-state-trends-carbon- pricing-2018.pdf>

Pick 'n Pay Stores The Spar Group Tiger Brands Exxaro Resources Sasol Investec Nedbank Redefine Properties Netcare Group Five Murray & Roberts Transnet Anglo American Platinum AngloGold Ashanti Arcelor Mittal South Africa Gold Fields Harmony Gold Mining Impala Platinum Kumba Iron Ore PPC Sibanye Gold MTN Group Shaoguan Hongda Mahindra & Mahindra Sundram Fasteners Benesse Bridgestone Futaba Industrial Mazda Motor Nissan Motor Nittan Valve Toyo Tire & Rubber Yamaha Motor Coway Hankook Tire LG Electronics KAO Lawson CJ Cheiljedang Pulmuone Essar Oil PTT Swire Pacific Daito Trust Constr Mizuho Financial Grp Nomura Sumitomo Mitsui Trust Tokio Marine Holdings Ayala Land KB Financial Group Mindray Medical Alps Pharmaceutical Astellas Pharma Daiichi Sankyo Hangzhou Greatstar CDP Shanghai Electric Cathay Pacific Hong Kong Aircraft

Dai Nippon Printing Lotte Chemical J Sainsbury Bic ArcelorMittal Carozzi North America East Japan Railway POSCO Muntons Groupe Eurotunnel AkzoNobel Vina Concha y Toro JTEKT Golden Arrow Unilever Legrand Koninklijke DSM Incubadora Santander Kawasaki Indorama Ventures OMV Saint-Gobain Borregaard Petrobras Kokuyo Hengtong Group Neste Schneider Electric Norsk Hydro Banco Santander LIXIL KDDI Total Vallourec Arkhangelsk Pulp and Paper Itaú Unibanco Mitsubishi NTT Docomo MOL Hochtief Acerinox Itausa Investimentos Shimizu True Corporation Eni Danieli & C Miquel Y Costas Ecorodovias.. Sun Messe Electric Power Dev Royal Dutch Shell Leonardo Finmeccanica Boliden Group Transportes Cavalinho Taisei Osaka Gas Vopak Arcadis SSAB Colcafe Toppan Printing Kansai Electric Power Aker BP Philips Lighting Tetra Pak Tecniamsa Toto Tokyo Electric Power Statoil Royal BAM Group Glencore Alcoholes ..Uruguay Doosan Heavy Industries Korea District Heating Galp Energia CTT Correios de Portugal LafargeHolcim Braskem Korail Railroa. Korea East-West PJSC Gazprom Ferrovial Anglo American Duratex LG Korea Electric Power Compañía Española de Gamesa BHP Billiton Fibria Celulose Global Brands Manufacture Korea South-East Petróleos Grupo Logista Hill & Smith Enaex APT Electronics JCDeceaux Repsol Consolidated Airlines Lonmin Cementos Argos Faratronic Kering Lundin Petroleum OHL Marshalls CEMEX Goodwell Michelin Premier Oil Prosegur Mondi AES Tiete Energia Henghao Renault Tullow Oil SAS Petra Diamonds Eletrobras Longwell Sodexo BNP Paribas Mediterranean Shipping Rio Tinto COPEL Picotronics Bertelsmann Credit Agricole SGS Magyar Telekom CEMIG T&W BMW Gecina Pegasus Hava Tasimaciligi Royal KPN CPFL Energia Infosys Daimler Societe Generale Balfour Beatty Euskaltel Colbun Tech Mahindra Puma Commerzbank CNH Industrial Swisscom Empresa de Energia de Canon Volkswagen Piraeus Bank Go-Ahead Group BT Group Bogota Fujitsu Fiat Chrysler Allied Irish Banks Linklaters TalkTalk Interconexion Electrica Hirose Electric Mazzucconi, Fonderie DNB ASA Morgan Advanced Materials Vodafone Aimia Hitachi Roechling Automotive Banco de credito social Morgan Sindall Verbund Canadian Tire Corp NEC Iberica De Sus. Banco Popular Espanol Senior Plc Fortum Freeze Rohm Inditex Banco Santander Spirax-Sarco Engineering EDF Fruit of the Loom Daeduck Electronics IKEA CaixaBank Stephenson Harwood Engie General Motors Samsung Comp. Financière RichemontBerner Kantonalban Travis Perkins Suez Hanesbrand AU Optronics Arcelik Credit Suisse Atos Veolia Superior Industries Darfon Electronics Vestel Elektronik Swiss Re Sopra Steria E.ON Walt Disney Delta Electronics Crest Nicholson Zurich Insurance Group SAP EnBW Energie Archer Daniels Taiwan Semi-conductor Man. Domino's Pizza T.Garanti Bank. Methode A2A Campbell Soup Well Shin Technology Jaguar Land Rover T.Sinai Kalkinma Bank. Sage Group ENEL Cargill Zhen Ding Techn. Liberty Global Turkiye Halk Bank. Sungard ERG Colgate Palmolive Delta Electronic Marks and Spencer Turkiye Kalkinma Bank. Solvay Hera Dean Foods Ming Fai Mindshare Aviva Novozymes Snam Kellogg ACC N Brown Group Barclays Metsa Board Terna Mars Ambuja Cements RELX Group Ernst & Young UK Outokumpu EDP Philip Morris International Dalmia Bharat Sky Henderson Group Stora Enso REN WhiteWave Foods Gulshan Polyols WPP Group Legal & General Investment Air Liquide Acciona ARC Resources JSW Steel Carlsberg Breweries Man. Arkema Enagas Cenovus Energy Tata Chemicals Carrefour Old Mutual Group MMP Packetis Endesa Encana Tata Steel Danone Unite Students MMP Premium Gas Natural Enerplus Denka So del S.p.A. Workspace Group Aurubis Iberdrola Husky Energy Hitachi Chemical Rixona Lundbeck BASF Vattenfall Imperial Oil JSR Jerónimo Martins Novartis D.G.W. Centrica Inter Pipeline Mitsui Chemicals Arnest Centaur Guernsey Edelmann National Grid Keyera Sumitomo Chemical Andres Serrano Nuffield Health Felix Schoeller Pennon MEG Energy Toyo In Coca-Cola Spire Healthcare HeidelbergCement Severn Trent Peyto Ube Industries Nestlé Palfinger thyssenkrupp SSE Seven Generations Energy (2018), Carbon. h;ps:// www.cdp.net/en/campaigns/commit-to-acCon/price-on-carbon HansolCommit Paper to Pu1ng a Price Migroson Ticaret Kingspan Group Smurfit Kappa United Utilities Suncor Energy Kumho Petrochemical Associated British Foods Aeroports de Paris Palladio Grupo Televisa TransCanada LG Chem Dairy Crest Group Air France-KLM Zignago Vetro Natura Cosmeticos Vermilion Energy

1,400 companies apply internal carbon price

California Resources Chevron ConocoPhillips Devon Energy Exxon Mobil GladieuxTrading Hess Occidental Petroleum Bank of Montreal Canadian Imperial Bank Great-West Lifeco Intria Items Power Corporation of Canada Power Financial Corporation TD Bank BNY Mellon Goldman Sachs Wells Fargo World Bank Group Allergan Biogen Dival Safety Equipment Air Canada Canadian National Railway Inscape Teknion Beck Group Brady Covanta Energy Cummins Delta Air Lines General Electric Harvard Maintenance Jacobs Engineering Owens Corning Parker-Hannifin Stanley Black & Decker Tennant Company United Continental United Technologies Waste Management Wisconsin Energy Conservation Adobe Alphabet Amphenol Autodesk Corning Incorporated Microchip Technology Microsoft Barrick Gold Catalyst Paper HudBay Minerals Resolute Forest Products Teck Resources Cabot Caraustar Industries

E.I. du Pont Eastman Chemical LyondellBasell Monsanto Newmont Mining Owens-Illinois Dow Chemical Mosaic Rogers Communications World Wide Technology Capital Power Hydro One Networks TransAlta Ameren American Electric Power Company, Avangrid CMS Energy DTE Energy Duke Energy Eversource Energy Exelon FirstEnergy Los Angeles Department of Water and Power NiSource. NRG Energy OGE Energy Ormat Technologies PG&E Pinnacle West Capital Public Service Enterprise. Sempra Energy SMUD WEC Energy Xcel Energy Wesfarmers Woolworths Origin Energy Woodside Petroleum AMP GPT Insurance Australia Investa Office Fund National Australia Bank Platinum Asset Management Stockland Westpac Banking Fisher & Paykel Healthcare Aurizon Holdings Cleanaway Waste Management Incitec Pivot South32 Spark New Zealand AGL Energy

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Three steps towards a circular/inclusive business case 1. Integrated reporting 2. The polluter pays principles 3. Lower tax burden on labour.

Interested? Femke@extax.nl

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Tax as a force for good  

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