1. Developing Green tax Policy; Enhancing
Energy Security and Addressing
Environmental Problems
Roozbeh Kardooni : PhD Candidate, University of Malaya
Dr Fatima Binti Kar : Associate Professor, University of Malaya,
2th conference on emerging trends in energy conservation – Tehran – Iran

2. Introduction
 The green economy has been major theme at the Rio +20 summit in Rio
de Janeiro, Brazil, on 20–22 June 2012. United Nation Environment
Program (UNEP) has defined a green economy as one that results in
improved human well-being and social equity, while significantly reducing
environmental risks and ecological scarcities. In its simplest expression,
a green economy can be thought of as one which is low carbon,
resource efficient and socially inclusive.
 One of the main reasons that cause increasing attention toward green
economy is due to fact that the global community is facing immense
challenges in handling environmental issues.

3. Introduction
market
failures
externalities
Environment
crisis

4. example of market failure
The harm done to human
health and the environment
from burning fossil fuels is not
reflected in its the price .

5. Green tax, definition of concept
 Green tax refer to a wide spectrum of fiscal pricing measures that
have the potential to simultaneously increase revenue and foster
green growth. More specifically, it entails : 1) a shifting of the tax
burden from traditional areas of taxation, such as income, saving,
and capital gains, to environmentally relevant products and activities
like fossil fuels and waste; 2) the redirecting of subsidies from
environmentally perverse activities toward activities that promote
green growth and poverty reduction. The entire reform of the fiscal
system is done with the aim of maintaining revenue neutrality: a net
zero increase in the level of taxation on the economy” .
 Source : The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP),”Green Tax and
Budget reform, 2012

6. Green tax, definition of concept
 Green Tax reforms generally consist of three types of
approaches: 1) Reduction or elimination of environmentally
harmful subsidies, including direct public expenditure ,
“market price support” and /or exemptions and other
provisions in environmentally related taxes potentially
harmful for the environment; 2) Restructuring of existing
taxes according to environmental criteria ;and/or ; 3)
Introduction of new environmentally related taxes
 Sources : Green Tax reforms in OECD Counties; An overview, 2004

7. Green tax & double dividend concept
 Green tax reforms are based on the double dividend
hypothesis that supports the idea that environmental
taxes improve welfare through two different channels:
first, by improving the environment (first dividend or
environmental dividend); second, by reducing the pre-
existing distortionary taxes .
 Sources : Green tax reforms and habits, Carlos de Miguel *, Baltasar Manzano Universidad de Vigo and
rede, Lagoas-Marcosende, s/n, 36200 Vigo, Spain

8. double dividend
The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), “Green Growth: A New Growth strategy for
Asia and the pacific”, 2012

9. Benefit of green tax
•In respond to the energy security challenge, Green taxation
can play an important role. Applying green tax policy can
help to secure supplies, encourage industries and
consumers to use energy more efficiently, and do so in
ways that sustain both economic and human development
while protecting the environment. Green tax especially can
Improving energy security and conservation by lowering
energy and resource intensity, Reducing vulnerability to
energy price fluctuations.
Energy
security
• By applying Green taxation, the producer has to
pay a “real price” for the pollution it imposes on
society. Since one element of green tax policy
consist of eliminating counterproductive subsidies
that benefit unsustainable development, moving
toward this approach result in redirecting funds
towards green growth and green economy .
Environmental
crisis

10. Thank you