Annual CBS International Tax Conference 2022

Cross-Border Issues of Tax Policies Preventing Climate Change

Conference approach and goals

To prevent and avoid disastrous effects from climate change a progressive transition to net zero greenhouse gas emissions by 2050 is generally regarded as essential. Many countries have adopted ambitious goals in their national legislation to achieve this goal. For example, Denmark passed legislation with an ambition to reduce GHG emissions by 70% by 2030.

There is strong consensus amongst countries that tax policy instruments will be essential in achieving net zero GHG emissions in 2050, as well as the intermediate national 2030 legislative goals. However, as of yet the combined national emission reduction commitments and policies fall short of the results needed to stave off the negative impacts of climate change. The OECD and European Commission are therefore looking to coordinate tax policy instruments on an international level to boost effectiveness and stimulate the wide legal adoption of such tax instruments. With G20 countries accounting for around 80% of GHG emission, the G20/OECD has expressed a wish to form an Inclusive Framework for global coordination of the taxation of GHG emissions with the aim to have broad global cooperation that extends well beyond the OECD membership.

Currently, there is not enough international tax policy discussion on how to achieve the goals, while preserving levels of prosperity and well-being, growth, and employment on both the international and national level. Such a discussion should go beyond merely carbon pricing and/or environmental taxation solutions. For example, to truly decarbonise production processes and move from a linear to a circular economy model, innovation stimuli should also be considered as part of the policy mix.

A fundamental question to be answered is if tax instruments, for both pricing-in external costs as well as stimulating innovation, are in fact the best available policy tools to get the job done. And if so, how does one coordinate these (tax) policy instruments in such a way internationally so that the GHG emission levels are effectively and sustainably reduced on a global level? In answering these questions, one has to also address and/or navigate several complicating factors. For instance:

1.       The time until 2030 in which to achieve fundamental changes in society is very short, perhaps too short for tax instruments to affect enough change in behaviour.

2.       While the world economy is still recovering from the impact of COVID-19, it is now also reeling from the speed at which interest rates are rising, and rates of inflation are increasing while the threat of a protracted war in Europe is looming. The question is where the necessary public and private investments to achieve the climate goals will come from in such an economic environment.

3.       And even when 1 and 2 are solved, there is a structural shortage on the labour market to implement the practical solutions on a scale needed to make a significant impact.

4.       How the necessary regulation and legislation can be shaped, enacted, and coordinated in time while having to navigate the political landscape of multiple countries

This conference aims therefore to promote the international tax law and policy discussion concerning climate change and tax policy, and concretely contribute to the development of policy instruments and supporting legislation that can act quickly and decisively without pushing the world economy in a recession that would make the necessary enormous (mostly private) investments illusory

Program 23 November 2022

9:00

9:10

Peter Koerver Schmidt

Opening and Welcome

Professor with special responsibilities in tax law Copenhagen Business School

9:10

9:40

Jeroen Lammers

Setting the Scene

External PhD Candidate tax law University of Amsterdam / External Lecturer tax law CBS

Sketching the legal framework and possible tax law instruments to reduce GHG emissions based on a comparison of the Danish and Dutch approach

9:40

10:25

Kurt van Dender

Inclusive Forum on Carbon Mitigation Approaches

Head of Tax and Environment Unit, Senior Tax Economist OECD

Organising international cooperation on the design and the implementation of policy instruments mitigating climate change at the global level.

10:25

11:00

Coffee break

11:00

11:45

Niels Kleis Frederiksen

Tax, subsidise or ban?

Chief Counsel Ministry of Taxation

Relationship between climate policy objectives and rational tax and subsidy policy design. Why are taxes good climate policy tools? Why use tax on CO₂ rather income tax incentives?

11:45

12:30

Marilyne Sadowsky

Fiscal Policies to Mitigate Climate Change

Associate Professor of tax law (Maître de Conférences) University Panthéon-Sorbonne

Discussing global trends in fiscal policies mitigating climate change and how these policies compare.

12:30

13:30

Lunch

13:30

14:15

Lars Gårn Hansen

Denmark and the world

Professor Food and Resource Economics University of Copenhagen / Member of the Chairmanship of the Danish Economic Council

The Danish approach and how that approach could complement international action to mitigate climate change.

14:15

15:00

An Theeuwes

Carbon Pricing Principles

Global Tax Policy Manager Shell / Chair Green Tax Working Group BUSINESSEUROPE / Co-Chair ICC Working Group Carbon Pricing Mechanisms

The business perspective on principles underpinning policy instruments, such as carbon pricing, and how to design them to fit day-to-day corporate operations.

15:00

15:30

Coffee break

15:30

16:15

Tarcísio Diniz Magalhães

Sustainable Windfall Profit Tax

Assistant Research Professor in Digitalization and Taxation at UAntwerp Faculty of Law (Business & Law Research Group)

The superiority of cost-internalising income taxation over consumption-based environmental taxes in a global context.

16:15

16:20

Peter Koerver Schmidt

Closing Remarks

16:20

18:00

Reception