Well-designed taxes can foster the use of less environmentally harmful products while also generating revenue for the public budget. However, economic instruments should primarily be used with a view to enhancing environmental effectiveness, and not only for revenue-raising. The European Union’s Eastern Partnership (EaP) countries (Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine) struggle with environmental challenges related to the consumption and end-of-life management of many harmful products. This OECD policy manual considers the potential use and implementation of four categories of product-related economic instruments to address some of these challenges: product taxes, tax differentiation based on environmental factors, deposit-refund systems and extended producer responsibility. The report is available to download on the OECD website.
November 19, 2018