In 1994, pursuant to a Parliamentary initiative, the Government of Norway appointed the Norwedian Green Tax Commission to investigate ways to shift the tax burden away from labour (e.g., income tax) and toward activities with environmental harms (such as increased emissions or use of natural resources). In addition, the Commission was requested to ensure that any proposals it developed regarding tax reform were “revenue neutral” (i.e., that they did not entail costs to the Treasury).
The Commission included representatives from four Ministries (Finance, Communication, Environment, and Energy), as well as representatives from industry, labour, local governments, environmental NGOs, and economists at universities.
In 1996, the Commission issued its final report. It recommended many changes (including increases) for green taxes. It also identified a number of governmental subsidies that provided negative environmental incentives, and it recommended that they be abolished, phased out, or reduced. The Commission suggested that the revenue that was generated from the increased green taxes and the reduced subsidies be used to reduce the taxation on labour (through payroll taxes) and to otherwise ease the transition.
The final report on Green Taxes – Policies for a Better Environment and High Employment is available (in English) at http://odin.dep.no/odinarkiv/norsk/dep/fin/1999/
eng/006005-992086/index-dok000-b-n-a.html
For more information, contact Mr. Atle Fretheim (who served on the Commission) at af@md.dep.no