Tax reforms for green economy

MONEYLAUNDERING

Thailand and other countries in the Asia-Pacific region are being urged in a new environmental report to enact tax reforms to promote green economies, which could lead to more efficient energy use and sustainable economic development.
The United Nations Economic and Social Commission for Asia (ESCAP), the UN Environment Programme (UNEP) and the Asian Development Bank (ADB) yesterday issued their call in Bangkok in a report: “Green Growth, Resources and Resilience-Environment Sustainability in Asia and the Pacific”.
The report said Asia and the Pacific region had the potential to be a world leader in low carbon growth, but only if it adopts a new development strategy.
“Policy choice is more important than technology or money,” said Rae Kwon Chung, director of the Environment and Development Division of the ESCAP.
“A green economy is not only a matter of technology and money but it is also more policy options and political will. But is very difficult. All politicians do not want to do it, since people don’t like it,” he said.
The report pointed out inefficient use of resources in the region, saying it uses three times as many resources to produce $1 of gross domestic product compared with the rest of the world. Resource use in the region also grew by 50 per cent between 1995 and 2005, the report said.
One of the problems is that many countries have provided fuel subsidies, causing waste of resources, Chung said.
He urged the Thai and other governments to remove fuel subsidies, as Indonesia has recently done.
“Subsidies for petrol mean that the governments provide subsidies to the rich who drive cars while the poor people who use buses breathe polluted air,” he said.
It is also up to the Thai government whether to impose a traffic-congestion charge on motorists; this is an example of how policymakers could use a tax policy to encourage fuel efficiency, he said.
He said cheap resources for production were gone, as the price of oil and other raw materials has soared.
Anna Stabrawa, regional coordinator for Asia and the Pacific Early Warning and Assessment of UNEP, said the Thai and Japanese governments had learned a lot from the devastation of their massive flood and tsunami.
She said the Thai government had to make water management a priority to prevent flooding, otherwise natural disasters caused by climate change would adversely affect the nation’s people and economy.
However, Hitomi Rankine, the environmental affairs officer of ESCAP, said that though Asia as a whole used resources wastefully, Thailand and other Asean countries used water more efficiently than Central Asia. This might be because the Asean economy is growing at ah higher rate than Central Asia, where economic growth is slower, Rankine said.
According to the report, by the start of the 21st century the Asia-Pacific region became the world’s largest resource user – overtaking all other regions combined. At the same time, poverty and gaps in access to service persist. Many economies are net importers of resources, and thus are exposed to the risk of rising resource prices.
About 545 million people in Asia and the Pacific still consume less than the global nutrition standard of 2,200 calories per day. A 10-percent rise in domestic food prices in developing Asia could push an additional 64.4 million into poverty, said the report.

The  region  uses three times as much resources to produce one dollar  of  gross domestic product (GDP), compared to the rest of the world and  resource  use in the region grew by 50 per cent between 1995 and 2005,
according   to   the   report.  At the same time, poverty and the lack of access to basic services persists. Rejecting the assumption that technology advances will be able to solve the problems  of  resource constraints, the report proposes specific strategies for  changing  economic  incentives  to  promote a green economy which uses resources  much more efficiently.  This is needed, it says, to “recalibrate the  economy”   so  that  it  is  in  closer  alignment  with  sustainable
development.