Lower incomes pay more for cleaner economy: report

People on lower incomes will be paying double the amount of climate-related taxes in 2021 than they do now and will be relatively harder hit than higher incomes, according to a report out on Monday

The report, commissioned by environmental organisation Milieudefensie and quoted by the Volkskrant, calculates that people on incomes up to €23,000 who are paying 2.1% of their disposable income in environmental taxes at the moment will pay 4.2% under this cabinet’s plans. Incomes from €89,000 will only see an increase from 0.8% to 1.2%, the paper writes.

Talks on a new climate and energy accord involving unions and employers’ associations and environmental groups will start at the end of this month. Milieudefensie has already said the cost of making the economy of the Netherlands greener must not be offloaded on low earners.




‘This will be a make or break issue,’ Milieudefensie spokesperson Donald Pols told the paper. ‘If the lower incomes bear the brunt of this they will protest and vote for weird parties. (…) Businesses should pay a substantial part of the costs,’ Pols is quoted as saying.

According to the report, by environmental researchers CE Delft, businesses are currently getting off lightly and the biggest polluters – heavy industry and electricity companies – are paying very in little climate-related taxes compared to households. ‘If they are not made to pay more there will be no new climate accord,’ Pols warned.

Crystal ball

Energy industry association VEMW says CE Delft’s conclusions come far too early. ‘Do they have a crystal ball or something?’ director Hans Grünfeld said. ‘The coalition agreement says we need a new energy and climate accord. That will lead to new measures but the negotiations have yet to start.

‘The coalition accord states little in the way of measures but it does formulate goals and those goals are far-reaching: an emissions reduction of 49% by 2030.’

Grünfeld said the principle of the ‘polluter pays’ is difficult to apply because it is hard to say who the polluter is – the person who makes the product or the person who buys it.

He warned that if the government slaps higher taxes on companies they will move production to other countries ‘where CO2 emissions are equally high’ the paper quotes him as saying.