The use oftax instruments to deal with air pollution in Portugal

Abstract

The Portuguese example might allow to extend the argument used by Jänicke that a country's environmental performance depends on its basic preconditions for ecological modernisation. The analysis of two taxes that the OECD/EEA database would allow to classify as NEPIs, the motor vehicle tax and the tax on petroleum products, seems to support the hypothesis that the number and/or performance of the NEPIs, namely tax instruments, is also influenced by the level of ecological modernisation observed in a country.

The basic variables that Jänicke claims to influence the ecological modernisation capacity of a country seem to have played an active role in hindering the environmental performance of the two taxes analysed. And this is so despite the fact that these are instruments that potentially could serve well environmental policy goals, due to the close connection they hold, through their tax base, with an important national problem, the pollution caused by road transport. In the case of the motor vehicle tax the relevant factors seem to have been the lack of consensus ability and of strategy proficiency. As far as the tax on petroleum products is concerned the problem seems to reside in the level of economic performance of the country and its lack of innovation capacity, with an important role being played by the institutional context.