Spain | Green taxation to fight climate change

There is evidence that climate change is largely caused by human action: greenhouse gases emissions into the atmosphere are the main cause of global warming.

Key points

• Key points:
• Experts warn we may be reaching a point of no return. Decisive action must be taken, led by governments and supranational organizations.
• In Spain, revenues from environmental taxation accounted for 1.8% of GDP and 5% of total tax revenues (tax and social contributions) in 2019. This was lower than in previous years and the Eurozone average (2.4% of GDP and 5.8% of total tax revenues).
• Spain is converging with the European average, but its environmental taxation seems aimed merely at revenue collection rather than at genuinely discouraging pollution. The industries that pollute the most are not always the ones that pay the most.
• Land transport is the sector facing the highest environmental tax burden (12.9% of GVA in 2019) and its emissions intensity stands at 1.2 kg per unit of GVA. Maritime transport, however, second in emissions intensity (4.6 kg per unit of GVA), pays environmental taxes accounting for only 0.2% of its GVA.
• The need to take climate action is urgent and taxation should be a priority to achieve this goal. In Spain, environmental taxation requires a comprehensive, harmonized and effective reform that will enable it to play a relevant role in the global tax system.

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