Another part of the impetus for ecotax reform has come from the side of tax-policy-makers and Ministries of Finance, through the recognition that some ecotaxes could have the potential for raising significant revenues.
In practice, significant scope for major tax reform financed by the revenues derived from ecotaxes is only likely to arise in the case of two potential environmental tax bases--taxes on road transport, and on energy.
In comparison with `conventional' regulatory policies based on technology or emissions standards, ecotaxes may be able to reduce the costs of achieving a given standard of environmental protection (or, alternatively, can achieve a greater environmental impact for a given economic cost).
Likewise, and again from the perspective of environmental policy, ecotaxes have a number of identifiable drawbacks and limitations, which will in some cases be sufficiently important to rule out their use in particular applications.
Turning to the environmental aspects, there is another problem in relation to the "double dividend": ecotaxes will typically be raised on the basis of products and activities that have a relatively low price elasticity -- otherwise they run dry as a source of public revenue.
Now we shall review several studies which have explored in more quantitative terms what could be expected of ecotaxes.
The employment dividend will be smaller as the revenues of the ecotaxes are smaller, for example, if they are collected from elastic activities and products; revenues may be greater when these activities are continued, but then the environmental dividend is reduced or nil.
The proposal of ecotaxes, whose revenues would be used to reduce taxes and charges on labour, is expected to pay a "double dividend" of enhanced environmental quality and increased employment.
A striking aspect of two of the ecotaxes -- those on batteries and on disposable cameras -- is that they resemble command and control as much as an economic instrument approach.
132] The taxes on paper and packaging, which are by weight or by volume, with few exemptions, make more sense although, as with the other ecotaxes, it is not clear whether there is a relation between the environment cost and the tax rate.
133] In practice, keeping close to the ideal is difficult, for lack of information as well as for practical reasons such as the lack of a suitable tax base, or the difficulty of enforcing ecotaxes also on imported goods, whose technical specification and environmental sensitivity could not be monitored in the same way as for domestically produced goods.