National Strategy for Ecologically Sustainable Development

Prepared by the Ecologically Sustainable Development Steering Committee
Endorsed by the Council of Australian Governments
December, 1992
ISBN 0 644 27253 8

Pricing and Taxation
Part 3 Intersectoral Issues - Chapter 20

Challenge

To develop pricing and taxation arrangements which reflect social and environmental costs of resource use, while taking account of the equity and economic implications of proposed actions.

Strategic Approach

Consideration of the increased use of economic measures for dealing with environmental problems will be encouraged, subject to careful assessment of the benefits and costs of such measures. Possible mechanisms for incorporating externalities into pricing and market mechanisms for environmental purposes, and environmental resource values into pricing policies will be examined.

Objective 20.1

  • to develop, improve and enhance the effective use of pricing and economic instruments as a means for achieving better management of our natural resources

Governments will:

  • continue to develop practical experience in the use of pricing and economic instruments, such as tradeable rights in management of resources
  • continue to monitor and assess the economic and environmental benefits of those economic instruments already in place
  • establish, on the basis of this information, pilot programs within a number of specific natural resource sectors as a means of testing the practicability and effectiveness of different mixes of market and regulatory mechanisms
  • consider further action on the wholesale sales tax applying to motor vehicles, and examine the merits of removing the fuel excise exemption for Commonwealth departments and agencies

Objective 20.2

  • to ensure that adequate attention is given to social and environmental costs when assessing the use of pricing, taxation and other economic instruments

Governments will:

  • have regard to the core ESD objective of providing for equity within and between generations in any changes to pricing and taxation policy resulting from this Strategy
  • facilitate inquiries by the Industry Commission on the practical application of pricing and taxation instruments and the social and environmental aspects of utilising those instruments
  • undertake a study into the quantification of environment and social costs of energy pricing
  • encourage utilisation of the results of work on the operational definitions for the concepts of intra and intergenerational equity, and the development of methodologies for placing risk weighted values on goods and services
  • cooperatively examine a range of policy and program alternatives to address public interest projects such as revegetation, remnant vegetation conservation, and improved water management, including in rangelands
  • encourage further work on development of a mechanism for valuing the household sector and including this information as a part of full resource accounting