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Blog posted by: Stephen Devlin

Should we continue to levy green taxes on energy use?

That’s the question currently dividing Tory and Lib Dem ministers, in the latest Coalition conflict over energy and environment policy. As public anger over rising energy bills intensifies, industry bosses are keen to blame their environmental and social obligations for increased costs to consumers – and senior Conservative MPs seem inclined to agree.

But let’s go back to principles: why do we levy taxes in the first place?

Generally, there are two distinct reasons, either or both of which may justify taxation:

1. To provide the government with a revenue stream so that it can provide public goods and services.
2. To discourage some activity that is considered to have negative consequences for our society or environment.

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