More of what you want and less of what you don't want!
Ecological fiscal reform (EFR) is
"a strategy that redirects a government's taxation and expenditure programs to create an integrated set of incentives to support the shift to sustainable development."1
It includes the use of such policy tools as taxation, tax exemptions, permit trading, tax rebates, direct expenditure, program expenditure and tax credits.
EFR includes reforms or redirections of subsidy, credit and direct expenditure programs, as well as what is commonly called ecological tax reform (ETR), or environmental tax shifting.
Ecological tax reform (ETR) involves adjusting existing taxes to make them sensitive to environmental impacts, or levying new ecological taxes to offer incentives to reduce environmental impacts and "recycling" the revenue from the new taxes. ETR revenue can be recycled in numerous ways — for example, by using tax revenue to fund reductions in existing taxes, new credit or subsidy programs, or refunds to taxpayers.
- 1. The National Round Table on the Environment and the Economy's Ecological Fiscal Reform Multistakeholder Expert Group.
