ICC Environmental Taxation Principles

There are many different economic instruments that can be used for environmental policymaking, including fiscal instruments and tradable permits, which aim to promote the production and use of environmentally sound products and processes within a market framework. By enabling industry and consumers to adapt to market signals, such instruments provide greater economic flexibility and efficiency over traditional command and control regulations.

This paper represents a first comprehensive ICC effort across the environment and taxation disciplines to help clarify and frame “environmental taxation” for non-experts on taxation. Whether taxes, subsidies or other policy instrument are employed, they need to be based on cost-benefit analysis, transparent and economically, environmentally, and socially effective.