Costs in climate change fight unevenly distributed; Big business paying too little

Citizens and SMEs in the Netherlands pay far more energy tax than the climate damage they cause, while industry, aviation and shipping pay too little, the Netherlands' environmental assessment agency PBL concluded in a study into who exactly pays for which greenhouse gas emissions. A significant part of the emissions in the the agriculture sector is not paid for at all, the researchers found, NOS reports.

The energy tax on electricity and gas in the Netherlands is structured in such a way that small consumers pay relatively more than large consumers due to the different brackets, PBL said. When it comes to electricity, the environmental damage in the third and fourth bracket is many times larger than is compensated for in taxes paid. Those are the brackets that the large consumers fall under. In the first and second bracket, which contain mainly households and SMEs, the taxes paid are higher than the environmental damage caused.

The ODE tax, called the Storage for Sustainable Energy and Climate Transition tax, is for the most part borne by consumers in the first two tax brackets, PBL added. The money raised for this tax is intended to finance the energy transition. Milieudefensie already raised concerns about the fact that, due to the ODE, the energy transition is mainly funded by small and medium sized businesses.

The PBL also found that, due to excise duties, the taxes for road traffic are sufficient for climate damage caused. The same is true for the tax on gas consumed in homes and smaller business premises. Here too the largest consumers pay too little.

The PBL said it sees "every reason" to review the energy tax on electricity, and not only because the costs are clearly unevenly distributed. "The current design is becoming an increasing obstacle to the energy transition," the agency said. For example, the energy tax does not take into account whether electricity was generated sustainably or with fossil fuels. "As a result, there is no incentive to generate more electricity from renewable sources."