Features of foreign tax policy in connection with the development of green technologies

Yumaev Mikhail ORCID: 0000-0003-2641-7747 Doctor of Economics Associate Professor, Department of Taxes and Tax Administration, Financial University under the Government of the Russian Federation 125933, Russia, Moskovskaya oblast', g. Moscow, Leningradskii prospekt, 49 mmyumaev@yandex.ru Other publications by this author

1. Introduction Over the past thirty years, the role of the environmental component has been constantly increasing, and in scientific research and program interstate documents, the introduction of environmental mechanisms into production processes, ensuring economic growth through the rational and integrated use of natural resources and reducing the level of negative impact on environmental components has various names: Green Revolution, Green Growth, Green Economy.

^{[1] [2] [3]}

The First Green Revolution refers to a series of research, development and technology transfer initiatives that took place between 1943 and the late 1970s in Mexico. The goal of the "green revolution" was to increase the efficiency of agricultural processes, their productivity and help developing countries meet the needs of a growing population.^[4]

It is advisable to consider the current stage as the second Green Revolution, it is associated with the introduction of technologies that are aimed at reducing greenhouse gas emissions or the creation of industries that exclude the impact of greenhouse gases on ecosystems.

The measures proposed within the framework of the 2nd Green Revolution should promote the growth of investments and innovations, which are the basis for sustainable growth and lead to the emergence of new economic opportunities.

The fundamental initiatives for greening the economy at the global level are: the UN Conference (1992) in Rio de Janeiro on Environment and Development ("Earth Summit"), at which the Framework Convention on Climate Change was adopted; the Kyoto Protocol to the UN Framework Convention on Climate Change of 1997, adopted for the purpose of development and clarification of the obligations of countries; the Paris Agreement to the UN Framework Convention, which entered into force on November 4, 2016.

The main goal of the adopted UN Framework Convention on Climate Change is to achieve a stable level of greenhouse gas concentrations in such values that would not allow dangerous anthropogenic impact on the climate system.

In 2009, within the framework of the Organization for Economic Cooperation and Development (OECD), a Green growth strategy was developed, which consists in stimulating economic growth based on ensuring the preservation of natural resources and their permanent rational use.

Within the framework of the European Community, the key document at the current stage is the so-called "Green Deal" (The European Green Deal), approved by the European Union in 2019 ^[5], which is a carbon-independent economic development strategy aimed at achieving carbon neutrality by 2050, and reducing greenhouse gas emissions by 2030. By carbon neutrality we mean the absence of carbon dioxide emissions and its analogues in the process of production activities or compensation of these emissions due to carbon-negative projects (absorption of emissions, restoration of ecosystems, etc.).

The measures taken on a global scale made it possible to ensure an increase in the specific values of the gross domestic product of the OECD countries per unit of CO2 by an average of 80 percent over the period from 1990 to 2019, the greatest growth was achieved in the Czech Republic, Denmark, Slovakia, Ireland, Luxembourg ^[6].

At the moment, after a number of tax reforms, some countries have formed green tax systems, the most important elements of which are taxes for the use of natural resources and taxes aimed at reducing harmful effects on ecosystems, for example ^[7]:

resource tax and environmental tax play an important role in Denmark's green tax system;

The Swedish environmental tax system is dominated by carbon dioxide, sulfur dioxide and nitrogen dioxide taxes;

Japan uses the format of an environmental tax system, in which the environmental tax and the resource tax have been primarily developed;

The United States and Great Britain have formulated the main provisions of green policy aimed at the development of new energy or low-carbon economic growth;

in China, where green development was proposed as a national strategy in 2015 due to a significant level of environmental pollution, the functions of green taxes are carried out by a fee for the discharge of pollutants, a land use tax, a tax on urban construction and maintenance, a tax on resources, a tax on the purchase of vehicles, a tax on urban services and construction, a tax on urban land use and a tax on vehicles and ships.

As a result of generalization of the world practice of environmental taxation, the following elements of "green" tax regulation can be distinguished: "green" taxes that are levied when using natural resources, as well as to counteract, reduce or compensate for damage from negative environmental impacts; "green" tax incentives, which are elements of "green" taxes or general taxes and encourage nature users to reduce the harmful impact on the environment.

The typology of "green" taxes and "green" tax benefits is given in Table 1.

Table 1. Generalized list of environmental taxes and environmental tax benefits (in the article, the terms "green tax" and "environmental tax" are equivalent)

Taxes, fees and charges related to the environment increase the cost of polluting products or activities and, as a result, hinder their consumption and production, regardless of whether this was the purpose of the tax or not.

Depending on the state and the type of harm caused, green tax regulation implies special tax preferences (deductions) in the case of investments in pollution prevention or environmental protection, when using green technologies.

Green (environmentally friendly) technologies are understood as technologies, production processes, methods of extraction and processing of natural resources, logistics tools, the use of which is neutral for ecosystems and humans, or when the harm caused by such technologies is significantly less compared to traditional technologies. Tax incentives for the introduction of green technologies imply a reduction in the fiscal burden on economic agents who use or intend to use such technologies.

The relevance of tax incentives for green technologies is increasing in the current conditions of the strongest economic crisis in a century associated with the coronavirus pandemic: on the one hand, incentives should eventually lead to an improvement in the environmental environment, which is important for human health, on the other hand, possible losses of budget revenues as a result of incentives should be compensated by an increase in production volumes. products produced using green technologies and the subsequent growth of tax revenues and GDP volumes. According to the UN, world GDP in 2020 decreased by 4.3% ^[8], even a growth of 4.7% in 2021 will not be able to compensate for the losses of 2020.

The economic crisis associated with the strengthening of mutual economic sanctions and the introduction of elements of an economic and political blockade in 2022 may lead to a significant decrease in global GDP, a change in the format of cross-border carbon regulation within the framework of the Green Deal and, in general, the content of the Green Revolution.

Nevertheless, the issues of tax regulation of environmental activities remain relevant.

2. The emergence and transformation of environmental taxesThe formation of legislation on payments for negative environmental impact and other measures of economic regulation of environmental impact in European countries, the USA, Canada and other countries began in the 70s of the XX century.

Various kinds of environmental taxes have been introduced in the member countries of the Organization for Economic Cooperation and Development (OECD):  taxes on resources, taxes on waste, garbage, taxes on noise, water pollution, carbon dioxide tax, sulfur tax and others.

In the EU Recommendation of March 3, 1975 ^[9], the purpose of collecting pollution charges is defined as creating incentives for nature users to take economically advantageous necessary and sufficient measures aimed at reducing pollution on their own. In case of non-compliance with this approach, the nature user is obliged to independently pay the costs of the state for the restoration of the disturbed favorable state of the environment. Currently, there are more than 150 instruments that can be divided into four main groups: (1) payments and taxes; (2) sale of permits for emissions and discharges; (3) collateral schemes; (4) subsidies.

In the country context, France introduced the forest tax for the first time in 1969, which is a kind of resource tax on the extraction of raw materials. In 1970, a tax on sulfur oxide (SO2) emissions was introduced in the United States. In other countries, emissions of other harmful substances (other than CO2), such as carbon monoxide (CO), nitrogen oxides (NOx), harmful substances, solid pollutants discharged into water bodies were also taxed.  The Japanese aviation fuel tax, levied since 1972, is an example of an energy tax that covers the energy tax for transport and for stationary use.

In the 1970s, a state fee was introduced in the Netherlands for the discharge of wastewater into surface water bodies. The fee was intended to cover the costs of measures to maintain the favorable quality of water bodies and was collected when wastewater was discharged by industrial enterprises and municipal treatment facilities. The payment was charged depending on the pollution units determined based on the proportion of chemical and biological pollutants.

In 1976, Germany also introduced a tax on wastewater from discharges by industrial enterprises and municipal wastewater treatment plants of harmful substances (nitrogen, zinc, phosphorus, lead, cadmium, etc.). Payments for discharge in Germany have the nature of penalties with a system of discounts for discharges within the limits of regulations, the use of the best available technologies or conducting environmental protection measures.

The difference between the tax on wastewater discharges introduced in the late 1990s in Denmark is that the fee is charged only for discharges of organic substances, nitrogen and phosphorus.

Unlike European countries, the United States practically does not apply payments for the discharge of pollutants with wastewater. The federal level is characterized exclusively by fines for violating the conditions of issued permits for negative impact. The states introduced payments for environmental pollution in the form of fees for emissions permits sold. At the same time, the polluter does not pay upon discharge, but acquires in advance a quota for the discharge of a certain substance at the market price.

A characteristic feature of the pollution payment system in China, introduced in 1979, is the absence of pollution charges within the established standards. At the same time, 29 pollutants in discharges and 13 compounds in gas emissions are subject to taxation.

The system of payments for emissions of harmful substances into the atmosphere in world practice, especially in the EU and OECD countries, is more complex and multiformat compared to the system of payments for discharges into water bodies due to the direct impact of atmospheric air pollution on human health and biosystems, recognition of the problems of global climate change and the desire to reduce emissions greenhouse gases, responsibility for transboundary air pollution ^[10].

In European countries, for the first time, a tax on emissions of harmful substances in Europe was introduced in 1990 in Finland, in 1991 in Norway and Sweden, in 1994 in Denmark.  These countries were also the first in Europe to introduce taxes and fees for emissions of other harmful substances, in particular for emissions of sulfur dioxide and nitrogen oxides.

The first carbon tax in North America was the carbon tax introduced in 2008 in the state of British Columbia in Canada, which applied to all types of fossil fuels. In 2012, the emissions taxation scheme was replaced by a phased reduction in corporate and income taxes.

The most relevant direction of development of environmental taxation at the present stage is associated with the impact of carbon emissions on the climate recognized by the world community: carbon taxes are among the economic instruments that affect incentives for emissions (in the scientific literature and government research on this topic, such taxes are recognized as forming the price of carbon, which makes it possible to include potential external the costs of the economy and society necessary to overcome the consequences of emissions by "monetizing" the negative impact on the environment); instruments that affect incentives for the production or consumption of products with a carbon footprint – a tax on products whose production involves carbon emissions.

According to the World Bank, 64 existing carbon pricing initiatives have been formulated ^[11]. The initiatives cover 46 national and 35 subnational jurisdictions and apply to 22 percent of global gas emissions (22 gigatons of CO2 equivalent).

However, the actual carbon price remains very low, for more than half of all emissions it does not exceed $10 per ton of CO2 equivalent.  According to experts ^[12], the implementation of the goals of the Paris Agreement, the price should reach at least US$ 75 per ton, but currently such a price level is set only for 5% of emissions covered by carbon regulation.  As a result of the spread of the COVID-19 pandemic, the decision to raise carbon tax rates in a number of jurisdictions was postponed, in addition, there was a decrease in market prices under quota trading systems due to changes in the structure of demand.

3. Methodology of carbon taxationAccording to the study of taxation systems aimed at reducing greenhouse gas emissions conducted by the European Commission in relation to the members of the European Union, Canada, Iceland, Israel, Norway and Switzerland ^[13], 142 taxes are in effect in 33 countries studied, which in one form or another are associated with greenhouse gas emissions, which include three main categories: carbon taxes, vehicle taxes, and energy taxes.

Some countries also apply taxes on non-carbon greenhouse gas emissions. In addition, in the course of this study, methodological approaches in environmental taxation in the United States, a number of Latin American and Asian countries are analyzed.

Carbon taxation in EuropeCarbon taxes

Applicable tax rates in European countries range from less than 1 euro per tonne of carbon emissions in Poland to 110 euros in Sweden. In Finland, Sweden, Denmark, Norway, Poland, carbon taxes have been in place for almost 30 years, a number of countries have introduced this measure recently (Portugal, France, Spain) or are only considering introducing it in the future (the Netherlands and Austria). However, half of the European countries, including Germany, Italy, Belgium and others do not have such a special tax, in order to curb carbon emissions in these countries, indirect instruments are used, such as energy taxes (excise taxes on fuel), transport taxes.

The amount or tax base of the carbon tax in each country also differs, which leads to a different share of greenhouse gas emissions taxed (from 3% in Spain (only fluorinated gas emissions are taxed) and Estonia to 62% in Norway) ^[14]. Operators subject to the European Emissions trading system ^[15] are fully or partially exempt from carbon taxes. The tax base of carbon taxes is rarely carbon or CO2 content.

Most countries administer carbon taxes in the same way as fuel excise taxes and calculate the corresponding rate in common commercial units based on official emission factors of various fuels, for example, for the amount of fuel (based on weight for solid fuels, volume for liquid and gaseous fuels).

Several countries apply a carbon tax directly on emissions (rather than on fuel): Poland, Latvia and Estonia. According to this approach, administrative and compliance costs are usually slightly higher than with fuel-based approaches, and carbon taxes are applied only if a certain level of emissions is exceeded, or to equipment that meets certain technological criteria. This may explain why countries using this approach are characterized by the lowest share of greenhouse gas emissions covered.

Carbon taxes often have important distributional effects, which in turn affect their viability. To mitigate the undesirable effects of distribution, existing carbon taxes are often incorporated into so-called revenue "recycling" measures, returning carbon tax revenues to compensate households and firms. Carbon taxes can also be revenue neutral: the introduction or increase of carbon taxation as part of the environmental tax reforms will lead to a reduction in other taxes.

Taxes on vehicles. Taxes related to the purchase and use of cars are a widely used measure aimed at reducing emissions of carbon dioxide and other harmful substances. There are three options for the frequency of taxation of vehicles: taxation upon acquisition and registration of a vehicle (registration tax); annual tax (tax on the use of a vehicle); combined option. In most countries, both taxes are charged. Only two EU countries (Poland, Norway), as well as Israel, tax only the registration of vehicles and eight that apply exclusively a tax on the use of vehicles. Two EU member States (Estonia and Lithuania) do not apply any of these taxes.

Countries use different tax bases to calculate car tax rates: increasingly, taxes are based on vehicle emissions or car features that correlate with greenhouse gas emissions as indirect indicators. For example, some countries do use CO2 emissions as a tax base or combine CO2 emissions with other indirect parameters. Such indirect parameters can be fuel consumption, fuel efficiency and gas emission standards.

In addition, the calculation of tax rates can be based on indicators that are not related to greenhouse gas emissions, such as vehicle fuel type, weight, vehicle size, number of seats, engine price and power, cylinder volume.

Countries choose different tax bases and, as a rule, combine different criteria for calculating vehicle tax rates. Taxes on the use of vehicles are most often based solely on criteria that are not related to gas emissions. Only a few countries levy basic vehicle taxes solely in connection with vehicle CO2 emissions: three for registration taxes (Spain, Great Britain and France) and only one for use tax (Cyprus). Most countries choose to combine the CO2 component with non-emission components, such as vehicle age, fuel type, cylinder volume.

Taxes on the use of heavy trucks are usually based on components other than passenger cars: in most countries, circulation taxes are levied based on the weight of vehicles and other indirect signs unrelated to gas emissions, such as the number of axles and the type of suspension. Only in a few countries – in Belgium, Norway, Cyprus and Malta, the circulation tax is based on CO2 emissions, while in Denmark it is levied on an indirect indicator - fuel consumption.

Energy taxes (excise taxes). Directive 2003/96/EC (Energy Taxation Directive, or ETD) sets minimum excise tax rates that EU member States must apply to energy products for motor fuels, heating fuels and electricity. Member States are free to apply excise tax rates above these minimum tax levels in accordance with their national needs and environmental objectives.

Energy taxes are not directly aimed at reducing greenhouse gas emissions, but they can have an indirect impact on emissions, firstly, by increasing energy efficiency (using less fuel per unit of production and less fuel per unit of revenue) and, secondly, by increasing efficiency if fuel is used with lower carbon content (the fossil fuel tax increases the attractiveness of alternative energy).

In the energy sector, energy taxes and charges are applied to energy products used for transportation, mainly for gasoline and diesel fuel, as well as for stationary facilities in relation to products such as fuel oil, natural gas, coal and electricity. The Directive sets minimum excise rates for kerosene, but all EU member States apply exceptions for air transportation. The applicable tax rate varies significantly depending on different energy products, sectors and countries. Most EU member States apply rates that are significantly higher than the minimum for most motor fuels. In particular, those countries that, in addition to the excise tax, also apply a carbon or CO2 tax to fuel, are characterized by a higher average total excise tax rate paid on motor fuels (Finland, Denmark, Sweden, Ireland, Slovenia and Portugal). On the other hand, several countries use Article 15(1) ETD78, which allows Member States to apply a reduction or full exemption of natural gas and LNG when they are used as fuel.

With regard to the use of fuel for heating purposes, most EU Member States apply rates that are significantly higher than the minimum reduced rates.

The minimum rates for commercial and non-commercial fuel use are equal for gas oil, heavy fuel oil, kerosene and liquefied natural gas (LNG), and Member States apply the same tax rate for these four fuels used in heating, regardless of their purpose, with the exception of Italy (for LNG and heavy oil), Germany (for LNG, gas oil and kerosene), Sweden (for kerosene, heavy oil and gas oil), where slightly higher rates are applied for non-commercial purposes. As in the case of motor fuels, countries that in addition to the excise tax also apply a CO2 tax are characterized by higher than the average total excise tax rate for heating fuel (Finland, Denmark, Sweden, Ireland, Slovenia and Portugal).

The minimum tax rates for natural gas, coke and coal used as heating fuel for non-commercial use are higher than the minimum rates for commercial use (0.3 euros per gigajoule as opposed to 0.15 euros per gigajoule for commercial use). 22% of Member States apply a minimum rate for natural gas for non-commercial use, and 52% apply a minimum rate (or a rate that is less than 10% higher than the minimum) for coke and coal for non-commercial use. The absence of an increase in minimum rates for more than a decade and low actual rates lead to a lack of interest in investments in energy-efficient and environmentally friendly technologies, which is especially relevant for coke and coal, which have a relatively high carbon content compared to other fuels, are often used for heating in some EU Member States (for example, in Poland, the Czech Republic), but for which the minimum tax rates do not contribute to reducing gas emissions.

With regard to the taxation of electricity consumed, several EU Member States apply nominal tariffs above the minimums established by the Directive (1 euro/MW*h for non-profit organizations and 0.5 euro/MW*h for commercial use). The highest tariff applied to electricity in 2020 was 125 euros/MWh in the Netherlands. However, the environmental arguments in favor of taxation of electricity are weaker than for taxation of motor or heating fuel. First, most electricity taxes are not differentiated by energy sources and therefore make all energy sources more expensive, regardless of the carbon content. Secondly, they can hinder the electrification and decarbonization of sectors such as road transport, which makes the transition to electricity (to electric or hybrid cars) less profitable for end users, all other things being equal.

Environmental taxation in the USAA carbon tax in the United States has been repeatedly proposed, but has never been adopted.

Currently, two regional carbon initiatives are being considered in the country, namely the cap-and-trade quota programs in California and Massachusetts. Nevertheless, several taxes have been introduced at the local level, taking into account the need to influence the reduction of carbon emissions:

San Francisco Coastal zone at 4.4 cents per ton of CO2;

on the territory of the Boulder Municipality in Colorado, a tax is levied on electricity consumption minus renewable energy produced – depending on the type of consumers, the tax rate per year ranges from $ 21 to $ 9,600;

In Montgomery County, Maryland, the first municipal carbon tax of $ 5 per 1 ton of CO2 has been introduced.

Energy taxes in the United States are fuel taxes that were first introduced in 1919 in the form of excise taxes, set and levied at the state level at specific rates in cents per gallon. Rates range from 14.40 cents in Alaska to 93.08 cents per gallon of diesel fuel in California, for gasoline – from 14.66 cents in Alaska to 66.98 cents per 1 gallon in California (as of October 2021).

As a result of repeated reforms, nineteen states have switched to taxation, which takes into account changes in prices for the relevant fuels, the inflation rate, the carbon component, in particular, the efficiency of the vehicle.

The federal excise tax on gasoline was introduced in 1932 and currently stands at 18.4 cents per 1 gallon. Currently, due to rising energy prices, the issue of abolishing the federal excise tax is being considered.

In the United States, there is also a special tax on aviation gasoline in the amount of 19.4 cents per 1 gallon and kerosene in the amount of 24.4 cents per 1 gallon at the federal level. State governments also set excise tax rates for these types of aviation fuel.

Taxes on transport. There is no direct tax on the use of cars in the states, it is payable when purchasing fuel (included in its cost). The rate is determined at the state level, the average rate is 45 cents per 1 gallon and does not depend on the degree of impact of the car on the environment. In addition, registration taxes are also levied, as in European countries.

  Environmental taxation in AsiaThe improvement of China's environmental legislation is taking into account the practice in this area of other countries, primarily the countries of the Organization for Economic Cooperation and Development.

For the People's Republic of China, the issue of negative environmental pollution is extremely important, given that the most polluting enterprises and production facilities are located on the territory of this state.

In China, in 2017, the non-tax payment for environmental pollution (which existed since 2003 and was credited to trust funds) was replaced by an environmental pollution tax, which, in accordance with the decree of the State Council of the People's Republic of China, is paid for emissions and discharges of pollutants, solid waste disposal, noise (following the example of a number of other OECD member countries).

Conceptually, the environmental tax is similar to the Russian payment for a negative impact on the environment, but unlike the payment, the Chinese tax is reduced depending on compliance with state and local pollution standards: by 75 percent in the case of environmental pollution in the amount of less than 30 percent of those stipulated by state and local standards; by 70 percent - when pollution occurs in less than 50 percent of the amount stipulated by state and local standards.

In 2010-2012, it was also planned to introduce a tax on carbon emissions in China, but since 2011, a system of non-tax regulation has been developing in a pilot mode - the sale of carbon emission quotas, which has been applied in the energy sector as a whole since 2021.

Indirect environmental taxation instruments in China are used in the form of consumer tax, which, in particular, is levied on the sale of petroleum products produced by the taxpayer in the range from 0.8 to 1.4 yuan per liter, as well as cars and motorcycles.

Taxation of transport in China is carried out using taxes that are traditional in world practice: a tax on vehicle owners and a tax on the purchase of vehicles and a tax on vehicle registration, and the amount of transport tax depends on the category of transport, for some types – on their weight.  

In Japan, carbon emissions are not directly taxed, however, since 2012, a climate change mitigation tax has been levied on oil, coal and natural gas in the amount of 289 yen (2.65 US dollars) per nominal ton of carbon that they emit during combustion. In addition, since 2010, Tokyo has had a local carbon trading system in which carbon permits are valued at about $50.

In the countries of the Eurasian Economic Union, common approaches are applied to the taxation of environmental management through the collection of payments for emissions and discharges of harmful substances, collection of transport tax, excise taxes, payments for the use (withdrawal) of natural resources. As for carbon regulation, only in the Republic of Kazakhstan out of all the EEA countries there are 31 carbon quota trading systems, but the auction price of a carbon unit (about 1 US dollar) is one of the lowest in the world.

In Kazakhstan, excise taxes are levied on the sale of gasoline, diesel fuel, gasohol, benzanol, nefras, a mixture of light hydrocarbons, ecological fuel, crude oil, gas condensate, as well as vehicles; transport tax is levied depending on the type of vehicle, its capacity, for certain types – on the carrying capacity, the number of seats. It should be noted that both railway traction trains and urban rail transport are subject to transport tax based on the total capacity.

Non-tax payment for the negative impact on the environment, established by the Code of the Republic of Kazakhstan "On Taxes and other mandatory payments to the Budget", is charged for emissions, discharges of pollutants, waste disposal, placement of sulfur generated during operations for exploration and (or) production of hydrocarbons, and emissions from mobile sources of pollution are also subject to taxation. Subjects of natural monopolies, energy-producing organizations, as well as landfill operators engaged in the disposal of municipal waste are taxed on a preferential basis (with the use of reducing coefficients). Payers who have been granted a comprehensive environmental permit (as part of the implementation of the program for the introduction of the best available technologies) are also exempt from the fee.

It should be noted that payments for the use of water bodies, wildlife and forest management are non-tax payments in the Republic of Kazakhstan.

4. Tax incentives to reduce the negative impact on the environmentEnvironmental tax benefits, despite the fact that they are recognized as public expenditures, since states do not receive significant funds as a result of their application, are aimed at reducing the level of negative impact on the environment in the same way as green taxes.

Tax benefits related to environmental protection (green tax benefits) can be divided into two categories: 1) aimed at reducing the harmful impact of industries or facilities in general on the environment, not related to the applied environmentally neutral technologies, and 2) stimulating the use of green technologies.

The first category of benefits includes benefits that contribute to reducing the negative impact on the environment (incentive benefits), and benefits that lead to the opposite effect (disincentive benefits).

The first group includes benefits to encourage the use of electric vehicles, benefits to improve energy efficiency and related innovations, and benefits to support public transport.

Benefits aimed at reducing the harmful impact of industries on the environment as a wholeIncentive tax benefits

Of the 33 countries studied, 25 exempt electric vehicles from vehicle taxes (registration taxes, usage taxes, or both).

Full exemption is the most common, however, a number of countries, such as Finland and Ireland, apply the lowest possible tax rate to electric vehicles. In some countries, exceptions are temporary (for example, 10 years of full exemption and 50% of the usual rate after that in Germany). Austria and the Czech Republic also exempt electric vehicles from other taxes, such as VAT for official cars.  Only two of the countries studied – France and Italy - have tax incentives to encourage the installation of charging stations.

In terms of stimulating energy efficiency, income or corporate tax benefits are common in the case of repairs of fixed assets in accordance with stricter energy efficiency rules, installation of environmentally friendly or energy-efficient equipment and machinery, and R&D in the field of energy efficiency. France, Lithuania, Poland and the UK also use VAT benefits.

Benefits to support public transport are applied in 11 countries, including VAT reduction (Germany, Austria), income tax benefits for individuals and organizations when purchasing season tickets, in Finland and Germany, public transport companies enjoy tax benefits when using energy in accordance with the ETD Directive.

Despite the positive impact of benefits as incentives to reduce the negative impact on the environment, there are categories of benefits that are not profitable to apply. These are subsidies that are the result of government actions that provide benefits to consumers or producers by increasing their incomes or reducing their production costs. According to the OECD definition, environmentally harmful subsidies are "... all types of financial support and rules that are put into effect to increase the competitiveness of certain products, processes or regions and which, together with the prevailing tax regime, (unintentionally) discriminate against reasonable environmental practices." Tax benefits are considered harmful when the provisions they provide in the tax system favor polluting behavior (for example, through the use of technology, consumption, etc.). They usually lead to negative environmental impacts such as increased emissions and support emission-intensive behaviors.

Disincentive tax benefitsIn the European Union, the following tax benefits are allocated related to the transport and energy sectors, which are recognized as disincentive due to the fact that their use leads to an increase in harmful emissions into the atmosphere:

- suburban allowances;

- advantages of using a company car;

- favorable tax regimes for specific business sectors;

- reduced excise taxes on fuel, electricity and the like for specific sectors (aviation, shipping, energy-intensive business);

- exemption from the carbon tax of companies that intensively use greenhouse gases.

Commuter allowances create incentives for the use of personal vehicles to travel to work. In this case, corporate or income tax revenues can be reduced by a certain amount, but the promotion of the use of personal vehicles increases the volume of fuel use, resulting in an increase in carbon and other harmful emissions compared to the use of public transport (Germany, Austria). The amount of the allowance may depend on the distance to the place of work and the availability of public transport routes).

The same consequences for harmful emissions are created by reducing the tax burden on official cars if they are used for personal purposes. Depending on the country, such preferences are applied in the form of deductions in personal or corporate income tax (for example, Austria, Belgium), value added tax (for example, Belgium, Czech Republic), where they may depend on the level of carbon dioxide emissions.

For industries that use vehicles (taxi services, rental vehicles, security services or courier services), a large number of countries use either full VAT exemption (France, the Netherlands) or in the form of tax deductions (Denmark, Finland). Also, the road tax for agricultural vehicles in the Czech Republic can be reduced by 25 percent, and in Spain such vehicles are exempt from a special road tax.

The most disincentive are the benefits – reduced rates and tax exemptions for certain transport industries, such as air and sea transport, which are currently completely exempt from taxation, as well as other sectors, such as energy-intensive industries and manufacturing or agriculture, as a result of which tax rates are reduced or a part of the tax is returned to companies (negative tax).  The rationale for such benefits, as a rule, is to preserve the competitiveness and social significance of such sectors, which is allowed under the ETD Directive. Such benefits apply to gas oil, kerosene, fuel oil, natural gas, liquefied petroleum gas, heavy fuel oil, coke, coal and electricity.

For example, gas oil used in agricultural industries is taxed at reduced rates in 20 European countries (for example, Czech Republic, Denmark) or at zero rate (Belgium, Croatia, Luxembourg), the same product used as heating fuel is also taxed at reduced rates in 20 countries.

At the same time, this benefit does not meet the objectives of the European Green Deal, which implies a revision of the ETD Directive and the European Commission's analysis of existing benefits for the hidden incentive to increase harmful emissions.

Carbon tax exemption for companies using greenhouse gases also exempts them from carbon tax when using fossil fuels. This applies to solid, liquid and gaseous fossil fuels when used for heating purposes and to gas stations. international competitiveness of enterprises in these industries. This exemption is usually applied when a high tax burden on CO2 can put the competitiveness of the industry at risk.

Tax incentives for green technologies (low-carbon technologies) in the general taxation system

In addition to the benefits that are aimed at reducing harmful emissions through reduced tax rates, deductions and exemptions for taxable objects or activities in general, a group of incentives should be identified, the condition of which is the expansion of the use of "green" technologies in industrial sectors, in particular low-carbon technologies.

According to the classification Organization for Economic Cooperation and Development (OECD), "green" technologies cover the following areas:

general environmental management (waste management, water and air pollution control, land restoration, etc.);

energy production from renewable sources (solar energy, biofuels, etc.), mitigation of the effects of climate change, reduction of harmful emissions into the atmosphere, improvement of fuel efficiency, as well as energy efficiency in buildings and lighting devices.

Such tax benefits are provided under the following conditions:

- purchase of energy-efficient equipment;

- implementation of projects for the capture, disposal and further use of greenhouse gases;

- use of renewable energy sources in the production of goods;

- the use of environmentally friendly vehicles and public transport (perhaps this has already been disclosed in other sections above);

- equipping buildings with installations using and producing renewable energy.

Benefits for the purchase of energy-efficient equipment for income taxes and income tax represent the possibility of accelerated depreciation when purchasing this equipment and if there is a certificate confirming the achievement of the initial goals of energy efficiency improvement:  in the UK, 100 percent of the cost of equipment is taken into account, in the Netherlands – 45.5%, in Colombia – 50%, in Hungary - 30-35%.

In addition, in the Netherlands, the so-called arbitrary depreciation of environmental investments is applied for income tax, when at the time determined by the investor, up to 75 percent of the costs for the purchase, production and modification of energy-efficient infrastructure are written off, as well as an environmental investment deduction in the form of a reduction in the tax base by 27%, 36% or 45% of investments (in depending on the type of asset) in addition to the usual depreciation.

In South Africa, the income tax base is reduced by 95 cents for each kWh of energy savings, which is confirmed by accredited organizations.

In the USA, through the income tax for individuals, the installation of energy-efficient exterior windows, doors and hatches, roofs and roofing products, insulation is stimulated: the tax is reduced by 10% of the costs for these purposes, in addition, a deduction of expenses (up to $ 500) is provided for energy-efficient heating and air conditioning systems, water heaters (natural gas, propane or oil), biomass furnaces.

Legal entities in the United States implementing carbon capture and storage projects have the right to reduce income tax by $20.22 - $31.77 (by 2026: $35 - $50) per metric ton of captured and buried CO2 (the benefit applies for 12 years from the date of commissioning of carbon capture equipment). An investment tax deduction is also provided: a 26% reduction in tax (22% at the start of construction in 2023) on property expenses, the purpose of which is to produce electricity from heat generated by a building or structure not intended for electricity production.

In addition, the United States also provides an investment tax deduction in the amount of 10% of the costs of creating a complex of technical means (CCC), which uses the same fuel to produce electrical, mechanical energy in combination with generating steam or other forms of useful thermal energy, produces at least 20% of its total useful energy in in the form of thermal energy, which is not used for the production of electrical or mechanical energy, and produces at least 20% of its total useful energy in the form of electrical or mechanical energy.

Benefits for the use of hybrid and electric vehicles are widely used in the world.

In Germany, individuals who use official electric cars/hybrid cars for personal needs include reduced amounts of material benefits in the tax base for income tax purposes:

- when using for personal purposes an official fully electric car worth less than 60,000 euros, 0.25 percent of the cost of the car per month is included in the tax base;

- when using a hybrid car or a fully electric car worth more than 60,000 euros, 0.5 percent of the cost of the car per month is included in the tax base.

The material benefit when using cars with an internal combustion engine is determined in one of two ways: by the mileage of the vehicle, which is proof of the actual expenses incurred, subject to income tax; when using the 1% rule, 1 percent of the reference price of the car is subject to taxation (this method is beneficial when using the car for personal purposes more than 50 percent of the total time of use car

Also, the material tax benefit is exempt from taxation in the case of charging an electric car or hybrid car at the employer's station.

Companies engaged in long–distance rail passenger transportation are subject to a reduced rate of 7% when selling tickets (the usual rate is 19%).

In the Netherlands, owners of electric cars are exempt from the motor vehicle ownership tax, in 2025 the rate is reduced by 25%, from 2026 the benefit is canceled.

In Poland, electric vehicles, hydrogen-fueled cars, hybrid cars with an engine capacity of no more than 2,000 cm3 are exempt from excise duty.

In the UK, the income tax base for companies that own electric cars and charging points is reduced by 100 percent of the cost of buying an electric car in the year of purchase, as well as by 130 percent of the cost of charging points for cars and vans.

In the United States, when calculating federal income tax, income is reduced by up to $7,500 when purchasing new fully electric or hybrid cars.

Tax incentives for the production and use of low-carbon and renewable energy are also provided in various forms.

In Colombia, taxpayers who produce renewable energy and nuclear energy are exempt from VAT when purchasing goods, works, services, and customs duties when importing equipment. For income tax, accelerated depreciation of 20% is applied annually for 5 years.

A similar approach to profit taxation is used in Peru and South Africa. In addition, in South Africa, companies investing in renewable energy production also have the right to reduce the tax base for three years by 50, 30 and 20 percent of the costs associated with the purchase and installation of machinery, equipment, inventory, tools and items used in the production of renewable energy.

In Poland, individuals engaged in thermal modernization (insulation) of family housing have the right to use a deduction from the tax base of expenses for construction materials, equipment or services related to the implementation of a thermal modernization project (including the replacement of energy sources with renewable ones).

In China, manufacturers of installations using solar energy are entitled to a refund of 50% paid for the sale of installations using solar energy.

In the United States, companies that spend on renewable energy production are entitled to an investment income tax deduction - a reduction in tax on the share of expenses on equipment used for renewable energy production, depending on the type of equipment: 26 percent – when using solar panels, fuel cells, low-power wind energy conversion systems; 10 percent – when using geothermal systems, microturbines and stations with combined power and heat generation; 30 percent – when using systems using coastal wind energy.

5. Cross-border carbon Regulation in Europe (Green Deal): Tax aspectThe tax mechanisms of global carbon regulation are one of the conditions for economic growth in a green economy.

Such mechanisms include the format of cross-border European regulation, which was developed in 2019 as part of the European "Green Course" on greening and decarbonizing the EU economy (reducing carbon emissions by 55 percent by 2030).

The main purpose of the draft Resolution of the European Parliament and the Council on the approval of the mechanism of cross-border carbon regulation (CBAM (carbon border adjustment mechanism) published on July 14, 2021) The prevention of carbon leakage is determined, that is, the movement of production outside the EU to countries where there is no strict climate policy, as well as the recovery of the EU economy after the pandemic, digital and "green" transformation under the general name NextGenerationEU. 

At the first stage of introduction (2023-2025), it was assumed that the use of this system would be limited to quarterly emission reports. Those countries1 that participate in the EU ETS or have their own emissions trading system linked to the EU system are not subject to the TUR mechanism. For example, Norway, Iceland and Liechtenstein have joined the EU ETS (Article 25 of Directive 2003/87/EC) under the Agreement on the European Economic Area.

The amount of payment (in the form of duty, excise duty or VAT) is assumed to be equal to the fee charged to European producers under the European quota trading system.

This payment is quasi-tax in nature, since it is essentially a transaction for the acquisition of a quota for carbon emissions into the atmospheric air, the masses of which are extraterritorial. The collection of this payment (either in the form of a special duty or quota) means crediting to the EU budget the amounts that will be used for European projects to reduce the carbon dependence of the economy.

Thus, national companies of states that do not have a national carbon taxation system will finance European projects to reduce greenhouse gas emissions.

The main task of the importing states of products to the EU in connection with the European mechanism being introduced is to develop national laws on carbon taxes with the establishment of payments in amounts comparable to European standards, which can create competitive advantages when promoting these goods to European markets. As the analysis of green taxes, the results of which are given earlier, shows, a small number of states apply special taxes on carbon emissions. Consequently, the European carbon regulation mechanism will require significant time and financial costs, possibly a revision of the entire national tax and economic legislation.

At the same time, the products of manufacturers of exporting countries, on the one hand, may not be in demand on the European market due to the burden of an additional payment and the corresponding lack of competitiveness, on the other hand, may lead to an increase in the cost of the corresponding products on European markets for European consumers and provoke price increases in neighboring industries. In our opinion, the impact of the cross-border regulation mechanism on reducing carbon emissions and replacing fossil fuel energy with alternative sources is not obvious. Moreover, when an exporting country levies direct or indirect taxes on greenhouse gas emissions, the fiscal burden on them increases significantly compared to companies within the European Union. This approach enhances the competitive advantages of European manufacturers.

On the other hand, exemption from the European payment in case of application of special taxes under national legislation will lead to significant costs associated with the administration of national carbon payment systems, determination of their level and comparison with European standards.

Greenhouse gas emissions affect the global climate background, however, it has a greater impact on the environment of the state in which production is carried out. However, the proposed system of European carbon regulation leads to an outflow of funds to improve the climate situation in the budget of the European Union. At the same time, the European Union also receives products with a lower carbon footprint, which leads to double benefits for it.

The mechanism of cross-border carbon regulation can negatively affect the most favored nation regimes applied by national jurisdictions outside the EU, including tax incentives for "green investments", and also lead to the opposite effect - dumping by corporations within the EU. Currently, the principles of European regulation imply the free distribution of carbon quotas between a number of goods, including steel and cement. When a cross-border tax is imposed on them, it will not be a method of climate regulation, but a tool for implementing protectionist policies, which contradicts the principles of the World Trade Organization.

The disadvantage of this system is also the likelihood that in the event of a sharp increase in the price of carbon, production with a high share of carbon emissions can be transferred to countries where there is no strict environmental regulation. Thus, the result of applying the mechanism will contradict the originally set goal of reducing the volume of greenhouse gases, when the volume of emissions not only does not decrease, but may increase and lead to both negative environmental consequences and a deterioration in the economic situation of the country in which carbon regulation is carried out (unemployment, a drop in export revenue).

The reason for criticism and shortcomings of the carbon regulation mechanism developed by the EU is its unpredictable impact on the economy of individual countries and regions, the expected, but not fully worked out environmental consequences.

The economic purpose of this mechanism is also obvious - to protect the interests of European producers who produce products with no or low carbon content in their production, primarily metals, fertilizers, cement, electricity by setting a fee when importing these products to the territory of the European Union.

The introduction of carbon regulation in Europe will require the creation of new management bodies for the administration of sales, resales, cancellation and supervision of the management of certificates, and, accordingly, an increase in the cost of administering the new system with consequences that are not obvious to the environment, but tangible for the world economy.

The introduction of unprecedented economic sanctions against the Russian Federation starting in February 2022, the expected refusal of the United States, EU countries and supplies of Russian energy resources, other types of Russian goods and goods of other jurisdictions, as well as the prospects of retaliatory sanctions, may lead to an acceleration of the launch of a cross-border carbon regulation mechanism and tougher approaches to environmental policy in relation to non-European goods. Under these conditions, the European market may become unprofitable and unpromising for most countries of the world community.

Based on the above, it can be concluded that the mechanism of cross-border regulation, which in any case will be implemented in the form of a tax or non-tax payment, cannot be effective if it is implemented outside the framework of international cooperation.

Since the climatic consequences of carbon emissions are felt for the whole of humanity, and not for individual countries and regions, the development of regional projects for the economic regulation of harmful emissions into the atmosphere not only hinders the free movement of goods, but also aims to support regional financing of clean air with non-obvious consequences for importing countries, which are forced to reform under the influence of regional interests national legislation, including in the field of taxation.

The world practice of taxation is characterized by a wide application of taxes and payments that are associated with a negative impact on the environment. Green taxes are designed to ensure the economic growth of states through the formation of qualitatively new principles for regulating interaction with the environment.

6. Conclusions In the Russian Federation, the creation of a system of economic regulation of greenhouse gas emissions is at an initial stage.

The main document in this area is the Federal Law "On Limiting Greenhouse Gas Emissions", which was adopted in 2021 and provides for the introduction of carbon units as a verified result of the implementation of a climate project.

This law is based on the potential introduction of state accounting of greenhouse gas emissions, as well as the formation of an appropriate register of greenhouse gas emissions: from December 30, 2021, organizations that meet certain criteria are required to report on greenhouse gas emissions.: the economic and other activities of which are accompanied by greenhouse gas emissions, the mass of which is equivalent to 150 or more thousand tons of carbon dioxide per year and corresponds to the production processes, the list of which is approved by the Decree of the Government of the Russian Federation of 14.03.2022 No. 355, including stationary combustion of liquid and gaseous fuels, combustion of associated petroleum gas on flare installations, technological operations during exploration, extraction, transportation, storage of oil, coal gas, metallurgical operations and other activities.

There are no taxes levied on greenhouse gas emissions in the Russian Federation, and carbon tax regulation is at an early stage. At the same time, in order to achieve the success of the formation of a climate-neutral taxation system, it is necessary to provide benefits and incentives for the creation and maintenance of fixed assets within the framework of the implementation of climate projects, as well as the implementation of carbon units.

The introduction of this law is largely aimed at preserving the competitiveness of Russian producers in European markets, which in the current conditions of cross-country restructuring of commodity flows, including Russian energy carriers, increases the importance of carbon regulation to ensure the formation of a national green tax policy.