Environmental Taxation

1. Introduction

Environmental taxes are a matter broadly and thoroughly discussed in academic, theoretical tax literature. The same, however, cannot be said about environmentally beneficial tax incentives. Most of the works in this field consist of empirical case studies on concrete tax incentives that have been implemented in individual countries.

A study identifying the meaning, content, and scope of environmental tax incentives is hence necessary. As part of a general, legal instrument, they have their own justification, guiding principles, and limitations. Also, given their imporS. 134tance in an economic environment, efficiency matters also play a role in their overall acceptance.

Tax incentives and taxes, as further addressed, are commonly compared to the metaphor of the “carrot and stick” in English language: a system in which someone is rewarded for some actions and punished for others. In German, nonetheless, there is another, more illustrative term for the same metaphor: Zuckerbrot und Peitsche (sugar bread and whip). The aim of this work is therefore to provide a recipe for what can be considered good sugar breads: in this case, the legal and economic aspects that shall be regard...