Analysis: Could Green VAT Encourage Sustainable Consumption and Production?

The concept would see consumers directed towards more sustainable and environmentally friendly products through taxation.

To ensure that the environmental impact of products is reflected in their costs, a new study published by the European Commission puts forward recommendations for a system of green VAT based on life cycle assessment.

This new economic tool would encourage sustainable production and consumption the researchers claim.

The paper, Towards stronger measures for sustainable consumption and production policies: proposal of a new fiscal framework based on a life cycle approach, by C. De Camillis and M. Goralczyk and published in the International Journal of Life Cycle Assessment proposes a system whereby VAT, calculated based on the environmental impact of the whole life cycle of the product, is used to guide consumers towards more sustainable, environmentally-friendly products.

The conclusion of the researchers is that this combination of VAT and LCA has the potential to have a significant impact on the sustainability of consumption and production.

The importance of decoupling environmental degradation from economic growth is highlighted by the EU’s Roadmap to a Resource Efficient Europe and Sustainable Consumption and Production and Sustainable Industrial Policy Action Plan.

The roadmap outlines how Europe's economy can be transformed into a sustainable one by 2050.

Read the entire article at thebioenergysite.com.