Increasing importance is being given to fiscal instruments in EU environmental policy. There are a number of reasons for this: evidence of the continuing deterioration of the environment throughout the Union; adaptation to the single market philosophy; Member States' initiatives in environmental policy, and so on. More important are the solid Treaty bases of sustainable development, the polluter pays, the precautionary principle and subsidiarity. All these have led the EU to start working on fiscal measures for environmental protection: tax incentives within the framework of excise duties; measures to stimulate the installation of catalytic converters; taxes on packaging materials; "biofuels"; and the (weaker) CO2/energy tax proposal of 11 May 1995.
Against this background, and aware that the main thrust of ecological tax reform is towards smooth hut radical change, replacing current taxes which have a distorting effect by others directed at activities which jeopardise the environment, is the European Union inclined to head in this new fiscal direction? The answer in his article is yes, hut, as is nearly always the case at EU level, the way will he long and difficult.
European Energy and Environmental Law Review