To discourage the use of polluting automobiles and vehicles and cut down the emission rates in the country, the Centre announced to levy a “green tax” on older automobiles. On behalf of the Road Transport Ministry, a green fee will be collected from transport vehicles older than eight years when they renew their fitness certificates. The income generated by the green tax will be stored in a separate account and used solely to combat pollution.
Key Features of Green Tax:
Exemptions
- Exemptions include cars such as powerful hybrids, electric vehicles, and those that operate on alternative fuels such as CNG, ethanol, and LPG, as well as farm vehicles such as tractors, harvesters, and tillers.
Differential Taxation
- Personal automobiles are recommended to be charged a green tax when their registration certification is renewed after 15 years.
- Green taxes will be reduced for public vehicles such as city buses.
- Vehicles registered in extremely polluting cities would face a higher green fee (50% of the road tax).
- A differential tax will also be levied based on the type of fuel (petrol/diesel) and the vehicle.
The rationale behind imposing the Green Tax
- Combating Health Risks from Vehicle Pollution: nitrogen oxides, photochemical oxidants, Carbon monoxide, particulate matter 2.5 and particulate matter ten, and other significant pollutants can have direct and indirect effects, such as acute respiratory disease, reduced visibility, cardiovascular ailments, morbidity, and impaired pulmonary function.
- According to the “Polluter Pays Principle,” people who cause pollution should shoulder the expense of controlling it to avert harm to human health or the environment.
- A factory, for example, that creates a potentially dangerous material as a byproduct of its operations, is usually held liable for its proper disposal.
Concept of Carbon Pricing
- India, along with the United States, China, and Japan, is one of the countries most affected by climate change. One clever strategy to mitigate the condition and reduce GHG emissions is carbon pricing, such as implementing a Green tax.
- Carbon pricing is a tool for capturing the negative externalities of greenhouse gas (GHG) emissions – the consequences of emissions that the public bears, such as agricultural damage, health care expenditures from heat waves and droughts, and property loss from flooding and sea level rise.
- Carbon pricing connects them to their origins by tying a price to the amount of carbon dioxide (CO2) released.
Green Tax Criticism
Additional Burden
- Imposing extra taxes on public transportation, like buses, will shift the cost to the general population, who are already suffering from revenue losses due to the pandemic.
- There are currently high tax rates on gasoline and diesel, and the green tax would add to the burden on car owners.
Inflationary Pressures
- Green taxes will increase total transportation costs, perhaps boosting overall inflation.
Final Thoughts:
Price Rationalisation
- Rather than imposing new taxes, prioritising hybrid and electric cars over carbon fuel-based vehicles might be accomplished by rationalising the pricing of such low-emission vehicles. Interventions such as pollution-monitoring mobile applications should be promoted as proactive measures.
Coordination of Efforts
- Combating air pollution is a public issue, and hence everyone’s duty. As a result, in addition to measures such as the green tax, there is a need for concentrated and coordinated initiatives involving all stakeholders. This should involve the government (national, state, and municipal), cities, the community, and the people.
