Industrial pollution tax

SDG(s)

Sustainable Development Goal(s)

3Good health and well-being

9Industry, innovation and infrastructure

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Type of the Solution

Green Taxation

Affected Sector

Industry

Description of the solution

Introduced alongside two other green taxes in 2014, Chile has a tax for PM, NOx, and SO2 emissions from industrial sources and thermo-electric plants. The tax is set at a variable rate based on the environmental damage associated with emissions in different areas. Thus, the tax rate not only captures the estimated marginal damage of a ton of emission in a specific locality but signals to companies the most environmentally efficient geographic location in which to be based. The policy has proved very effective, raising significant revenue and PM levels dropping by approximately seven percent from the regulated industries. In addition, generators have agreed not to develop new coal-fired plants and to phase out existing ones.

Socio-economic effects

Health.

Type of Measure

2. policy/regulation measure

Type of sub-measure

5. (none)

Who led the solution

National government

Timescale of implementation

Short-term (up to 1 year)

Other Notes

On finance: green taxes can be a significant source of income for the state to be used for further reducing air pollution. It should not be relied on as a source of income long-term as the goal is to reduce emissions and hence the tax revenue.

Links to the solution