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Eco-tax flop: only 1% is spent on the environment

According to a recent report by Ref Ricerche, eco-taxes are worth 3,3% of GDP and weigh more in Italy than in other EU countries. Despite this, only 1% of the revenue from environmental taxation is used to finance initiatives aimed at protecting the environment

Eco-tax flop: only 1% is spent on the environment

Environmental taxation is not used to protect the environment. An all-Italian paradox that becomes even more serious if we take into account the importance that the fight against climate change has assumed in recent years on a global level. What are these taxes for then? Raising cash: only 1% of resources are spent on environmental protection.

This is what emerges from the latest report by Ref Ricerche entitled (somewhat exemplary) “The ecotax in Italy? Little Eco but a lot of tax”. The study explains that eco-taxes are worth 3,3% of GDP, guaranteeing the Italian state a revenue of almost 58 billion euros: 46 come from energy taxes (taxes on mineral oil, coal, methane gas and electricity) 11 from those on transport (road tax and Rc Auto), 600 million from environmental taxes on pollution. 

Looking beyond our borders we also discover the incidence of environmental taxation in Italy, equal to 7,8%, is higher than the European Union average (6%), but also higher than that of the other major economies of the old continent such as the United Kingdom (7%), Spain (5,3%), France (5,1% ) and Germany (4,5%).

Also in terms of incidence on GDP the Italian figure (3,3% we recall) proves to be higher than the EU average (2%) as well as the already mentioned major economies of the continent: an example is Germany, where the weight of eco-taxes on GDP is equal to 1,8%. 

Apparently, the above percentages would lead one to believe that Italy is a virtuous example in terms of environmental protection policies. “But appearances are never as deceptive as in this case”, explains Ref. Analyzing the real destination of the taxes, defined among other things as “purpose taxes”, we discover that only 1% of them “are actually used to finance recovery and environmental protection actions while the remaining 99% is instead dedicated to covering general expenses that have very little to do with the environment”. In figures, of the 58 billion raised thanks to eco-taxes, only 561 million are destined for environmental objectives. The rest represents a source of taxation, similar to the others that have nothing to do with sustainability, pollution, climate and so on.

The Ref report then goes on to analyze waste taxesincluded in environmental taxes on pollution. In 2018 they brought the State 619 million euros (+19% on 2015).

“And yet, even in the case of waste, resource usage does not go in the stated direction. With an additional criticality, linked to the instrument used: the "special landfill tax" or, more simply, "ecotax". Introduced in the mid-XNUMXs with the aim of discouraging the production of waste and promoting the recovery of materials, it was therefore intended to avoid recourse to landfills by financing plant engineering solutions that were more sustainable from an environmental point of view. That approach, so modern that it harmonizes well with the current criteria of the Circular Economy (as well as with EU Directives), unfortunately did not translate into an effective modulation of the tax itself”, reads the report. 

Originally the law stipulated that 20% of the proceeds should go to waste reduction initiatives. In reality, the ecotax has turned into yet another levy.

The use of landfills continues to be decidedly marked, with still high disposal rates out of the total waste produced. In the case of municipal waste, it reaches up to 22%, i.e. percentages that are very far from the target set by the EU Directives of 10% in 2035. Failure to adjust the maximum rate ceiling has ensured that “the “landfill” solution continued to be convenient, fulfilling the role of reference and essential plant engineering solution in many areas of the country. At the same time, experts complain about the lack of sufficient investments to ensure the development of plants aimed at recovery and recycling.

Ref's advice is therefore to support plant alternatives to landfills, pursuing an opposite policy to the one implemented so far which instead relies entirely on landfills, to the detriment of the environment and eco-taxes, little eco and a lot of taxes.

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