World forum calls for natural resource tax

To combat soaring consumption of natural resources, the World Resources Forum (WRF) is calling for a global strategy to frame a new economic model that would directly tax raw materials instead of products and labour.

The World Resources Forum 2009 (WRF ) will tomorrow (16 September) adopt a declaration calling for a new global strategy governing the use of natural resources.

The forum will call for goods and services to be "dematerialised" and employment opportunities to be "maximised", as well as demanding international equity and per capita welfare improvements.

The draft declaration argues that while traditional environmental policies have in some cases been quite successful regarding water pollution in rich countries or recycling and removing dangerous goods from the market, for example, these policies are "toothless" when it comes to fighting the depletion of natural resources.

New economic framework

The draft declaration stresses that "politically defined economic framework conditions have to be adjusted to protect global ecosystems" and preserve resources for future generations. Such conditions should include incentives to make planned transitions immediately, instead of waiting for catastrophes to force the changes, it adds.

There are no incentives or policies in place to create a "sufficiently resource-efficient economy," notes the draft, while current markets are "blind to the environmental costs of growth" and hamper major increases in resource productivity. This is largely because market prices do not include environmental externalities and information is not made available to the relevant innovative stakeholders, it adds.

Tax resource use, not labour or end products

Adjusting the fiscal framework is "the most fundamental and urgent pre-requisite for approaching a sustainable future," the draft states.

It calls for subsidies that increase resource consumption to be eliminated, and highlights the need to shift away from taxing labour to taxing raw materials. This would have the "side effect of creating new jobs and redistributing income to developing countries where many of the resources come from," WRF notes.

Going even further, the declaration suggests that instead of applying VAT to end products, "it may be more effective to tax natural resources at the point at which they are removed from nature or where they enter the industrial metabolism".

'Dematerialising' goods and services and introducing low impact production systems will also require "radically new infrastructures, goods, services, processes, systems and business models," as traditional environmental technologies are no longer enough to decouple the meeting of human needs from the use of natural resources, WRF underlines.

Europe urged to measure resource use

Michael Warhurst of Friends of the Earth Europe (FoEE), an environmental NGO, deplored that Europe "has no targets" for reducing resource use, while "new policies are not assessed for their potential to increase our resource efficiency".

In a joint report with the Sustainable Europe Research Institute, FoEE is calling on the EU to measure its resource use and adopt new policies, such as higher recycling targets, to increase resource efficiency.

They suggest that Europe should measure its use of materials in particular, but also its land and water use and greenhouse gas emissions, taking account of the impact of Europe's consumption on the rest of the world in terms of imported resources.

EurActiv