Green Taxes, Grants & Other Supports

Local & National Policymakers, Revenue Commissioners, Sustainable Energy Authority of Ireland (SEAI)

Local and national government should use their powers to incentivise environmentally sustainable behaviour and should penalise behaviour that damages the environment. There are various tools available to local and national government to encourage green practices including taxes (tax rates, tax credits, rebates, etc.), grants, laws and regulations. For example, lower taxes could be levied on individuals, organisations and companies that act in an environmentally sound way. Higher taxes could be levied on those that cause pollution.

Examples of taxes and levies that could be lowered include: development levies on construction of quality medium- to high-density housing in the city centre; taxes for shared cars; taxes on labour (income tax); taxes on eco-friendly building materials (lower taxes on timber versus concrete).

Grants or tax breaks could be awarded to encourage sustainability. This type of incentive includes: grants for retrofitting buildings to make them low-energy (better insulation, heating controls, etc.); grants for renewable energy systems; grants and tax breaks for investing in energy efficient equipment (in factories, etc.), forestry grants and tax incentives.

There could be grants and tax breaks for local people setting up companies in the green sector.

The feed-in tariffs for small scale and domestic renewable energy generation (wind and PV) could be reinstated.

Examples of taxes and levies that could be introduced or increased include: carbon tax on fossil fuels; taxes on mineral extraction or mining; taxes on landfill and waste incineration; taxes on packaging; the plastic bag levy; vehicle registration tax (VRT) on motor vehicles with high carbon emissions. The air travel tax (on flights departing the country) could be reinstated.

A site value tax (SVT) could replace a property tax. Instead of taxing a building’s market value, it is the land the building is on that is taxed. SVT has been used to some degree in many countries including Denmark, Canada, Australia and New Zealand. This tax is useful in cities and towns as it encourages landowners to build on derelict sites, and stops land being hoarded by speculators.

However, if a site value tax is not introduced and a property tax is retained, the rate of property tax on a building could depend on the BER (Building Energy Rating) of the building so that a house with a good rating (say, an A or B rating) would pay less property tax than one with a worse rating.
Sustainable Energy Authority of Ireland (SEAI), Wilton Place, Dublin 2