Green Revenues for Green Energy

The report examines how environmental taxes and other market-based instruments can fund renewable energy deployment. Through eight case studies from diverse economies, it argues that EFR can generate a 'double dividend' by reducing pollution while providing stable funding for green energy. It highlights the importance of revenue recycling to maintain economic competitiveness and the role of earmarking in increasing policy transparency and public acceptance. For China, the report suggests transitioning from electricity surcharges to a system based on natural resource and carbon taxes to ensure long-term investment stability.

• Environmental fiscal reform (EFR) can generate a "double dividend" by simultaneously addressing environmental pollution and providing necessary funding for renewable energy technology deployment.
• Earmarking tax revenues for specific goals like renewable energy increases transparency and public acceptability, although it can reduce general budgetary flexibility.
• EFR measures do not inherently hinder economic growth; if revenues are recycled effectively, the impact on the economy can be positive.
• Revenue stability for green spending can be achieved through mechanisms such as quarterly or annual tax rate adjustments, price caps, and price floors.
• In Denmark, the Public Service Obligations (PSO) tariff—a levy on electricity consumption—has been a primary driver for renewable energy expansion, helping increase the renewable share of domestic electricity production from 5% in 1994 to 41% in 2011.
• The German Energy and Climate Fund (ECF) demonstrates the risk of relying on volatile market-based revenues, as low EU ETS allowance prices led to significant funding shortfalls.
• India's Clean Energy Cess on coal has raised significant funds for the National Clean Energy Fund (NCEF), but poor governance has led to approximately 75% of the budget remaining unused.
• The United States' use of the Production Tax Credit (PTC) has caused 'stop-and-go' cycles in the wind industry due to the need for frequent Congressional renewals, which creates market uncertainty.
• The 1603 Treasury Grant in the US proved more effective than tax credits for many developers by providing immediate cash, leveraging over US$62 billion in additional project financing.
• Alberta's Specified Gas Emitters Regulation (SGER) shows that intensity-based targets can be politically viable for industrial emitters, though low carbon prices may limit their effectiveness in driving transformative change.
• China's current reliance on an electricity surcharge for renewable energy funding is viewed as placing a disproportionate burden on consumers, necessitating a shift toward EFR measures.
• For China to achieve its 12th five-year plan target of 20% power generation from renewables by 2020, it requires substantial investment, estimated at US$67 billion in 2012 alone.

APA

Cottrell, J., Bridle, R., Yongqiang, Z., Jingli, S., Xuxuan, X., Beaton, C., Leopold, A., Meyer, E., Sharma, S., & Cheng, H. (2013). Green Revenues for Green Energy. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/china_green_revenue_en.pdf

Chicago

Cottrell, Jacqueline, Richard Bridle, Zhao Yongqiang, Shi Jingli, Xie Xuxuan, Christopher Beaton, Aaron Leopold, et al. Green Revenues for Green Energy. International Institute for Sustainable Development, 2013. https://www.iisd.org/system/files/publications/china_green_revenue_en.pdf.

Wikipedia

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BibTeX

@techreport{cottrell2013green, author = {Cottrell, Jacqueline and Bridle, Richard and Yongqiang, Zhao and Jingli, Shi and Xuxuan, Xie and Beaton, Christopher and Leopold, Aaron and Meyer, Eike and Sharma, Shruti and Cheng, Han}, title = {{Green Revenues for Green Energy}}, institution = {International Institute for Sustainable Development}, year = {2013}, month = oct, url = {https://www.iisd.org/system/files/publications/china_green_revenue_en.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }