Environmental economic instruments

Updated: 12. October 2020

Next update: 29. September 2021

Change in environmental taxes

Selected tables and figures from this statistics

About the statistics

Environmental economic instruments are taxes introduced to correct for negative effects on the environment caused by human activities. The definition of environmentally related taxes applied in the international reporting differs from that used for environmental taxes.

Environmental economic instruments are those instruments that are introduced either in order to correct for negative effects in the environment caused by human activities (making environmental damage more expensive) or introduced in order to encourage environmentally friendly initiatives (making environmental friendly activities cheaper). The purpose of these instruments are to change todays production- and consumption patterns in line with the environmental- and climate change political goals in the least costly way. Examples of environmental economic instruments are taxes, fees, subsidies and other transfers, emission permits and reimbursement arrangements.



Environmental economic instruments do not include juridical instruments, i.e. rules and regulations or voluntary arrangements.



At the time being, the statistics on environmental economic instruments includes environmental taxes incl. purchase of emission permits.



An environmental tax is a tax levied on a market activity to internalize the cost of negative externalities associated with this activity. In the presence of negative externalities, the social cost of a market activity exceeds the private cost. Then the market outcome is not efficient, i.e. the market tends to over-supply. An optimal environmental tax is equal to the marginal negative externality. Environmental taxes are defined as a Pigouvian tax.



Taxes included in the statistics on Environmental economic instruments are based on those transactions that in the national accounts are defined as taxes.



The environmental taxes are systematised according to 5 main categories. See table.

Main category

Tax

Tax on greenhouse gases incl. emissions permits, total

Tax on C02 emissions

Tax on CO2 emissions in the petroleum sector

Tax on greenhouse gases HFC and PFC

Motor vehicle registration tax - imputed CO2 component

Imputed tax on emission permits

Tax on NOX and sulphur emissions, total

Tax on NOX emissions, petroleum sector excepted

Tax on NOX emissions in the petroleum sector

Sulphur tax

Motor vehicle registration tax - imputed NOx component

Taxes on noise and local pollution from road use etc., in total

Petrol tax

Diesel tax

Tax on lubricating oils

Taxes on waste, total

Tax on the final treatment of waste

Environmental tax on disposable beverage packaging

Other taxes on environmental issues n.e.c., in total

Tax on tricloreten

Tax on tetracloreten

Tax on pesticides

Tax on mineral oils

As of2013, environmentally related taxes are included in the obligatory reporting to the European statistics agency, Eurostat. The definition of environmentally related taxes applied in the international reporting differs from that used for environmental taxes. Eurostat, the OECD and the UN define an environmentally related tax as "A tax whose tax base is a physical unit (or a proxy of it) of something that has a proven, specific negative impact on the environment" where a list of consumption, products and activities (tax base) are per definition considered environmentally harmful. This definition is primarily chosen in order to enable international comparisons. It is what is taxed that decides whether the tax is considered an environmentally related tax or not. This means that a tax that does not correct for negative effects on the environment can still be classified as an environmentally related tax. For example, tax on the consumption of electricity and use-independent car taxes as annual taxes and re-registration tax are included in the international reporting as consumption of electricity, and all transport activities by definition are considered harmful to the environment. The international reporting includes several individual taxes and is divided into categories other than environmental taxes.

Tax bases included in the environmentally related tax statistics framework

Energy products (including fuel for transport)

Energy products for transport purposes

  • Unleaded petrol
  • Leaded petrol
  • Diesel
  • Other energy products for transport purposes (e.g. LPG or natural gas)

Energy products for stationary purposes

  • Light fuel oil
  • Heavy fuel oil
  • Natural gas
  • Coal
  • Coke
  • Biofuels
  • Electricity consumption and production
  • District heat consumption and production
  • Other energy products for stationary use

Greenhouse gases

  • Carbon content of fuels
  • Emissions of greenhouse gases (including proceeds from emission permits recorded as taxes in the national accounts)

Transport (excluding fuel for transport)

Motor vehicles import or sale (one off taxes)

Registration or use of motor vehicles, recurrent (e.g. yearly taxes)

Road use (e.g. motorway taxes)

Congestion charges and city tolls (if taxes in national accounts)

Other means of transport (ships, airplanes, railways, etc.)

Flights and flight tickets

Vehicle insurance (excludes general insurance taxes)

Pollution

Measured or estimated NOx emissions

Measured or estimated SOx emissions

Measured or estimated Sulphur emissions

Other measured or estimated emissions to air (excluding CO2)

Ozone depleting substances (e.g. CFCs or halons)

Measured or estimated effluents to water

  • Measured or estimated effluents of oxydisable matter (BOD, COD)
  • Other measured or estimated effluents to water
  • Effluent collection and treatment, fixed annual taxes
  • Non-point sources of water pollution
  • Pesticides (based on e.g. chemical content, price or volume)
  • Artificial fertilisers (based on e.g. phosphorus or nitrogen content or price)
  • Manure

Waste management

  • Collection, treatment or disposal
  • Individual products (e.g. packaging, beverage containers, batteries, tyres, lubricants)

Noise (e.g. aircraft take-off and landings)

Resources

Water abstraction

Harvesting of biological resources (e.g. timber, hunted and fished species)

Extraction of raw materials (e.g. minerals, oil and gas)

Landscape changes and cutting of trees

For the industry breakdown, the Statistical Classification of Economic Activities in the European Community (NACE rev 2)is used.

Name: Environmental economic instruments

Topic: Nature and the environment

29. September 2021

Division for National Accounts

National figures

Frequency: Annual figures.

Timeliness: In September year t figures divided by industries are published for year t-2 together with total figures for year t-1.

Annual reporting of environmental related taxes by industries are obligatory according to EU-regulation 691/2011 on environmental accounts.

The input data and statistics is stored according to the instructions in Statistics Norway.

Environmental economic instruments are instruments introduced either to correct for negative effects in the environment caused by human activities, in other words making environmental damage more expensive or introduced in order to encourage environmentally friendly initiatives, in order word making environmental friendly activities cheaper. The purpose of these instruments are to change todays production- and consumption patterns in line with the environmental- and climate change political goals in the least costly way.

The purpose of the statistics on environmental economic instruments is to give an overview of which economic instruments to be regarded as environmental ones and to show which economic actors that are affected of these instruments. The statistics on environmental economic instruments includes now only taxes (as defined in the National accounts) included costs related to purchases of emission permits. Development of this statistics to also include other environmental economic instruments is considered continually.

The statistics was published for the first time in December 2014.

The statistics on environmental economic instruments gives an overview of the development in costs by industries and households from paying these instruments. Since the statistics on environmental economic instruments is compiled using the same scope and industry breakdown as other economic and environmental accounts in Statistics Norway, it is possible to do analyzes combining different statistics, not doing analyses only based on the statistics on environmental economic instruments alone.

Environmental related taxes are reported to Eurostat using another definition than that used in the national statistics for environmental taxes, for more information see “Definitions”.

Tables showing detailed industry breakdown is available for both definitions in the StatBank.

Figures for environmental economic instruments are mainly used for:

1. Public administration and the authorities.

2. Research and education/teaching.

3. International reporting.

4. General information.

No external users have access to the statistics and analyses before they are published and accessible simultaneously for all users on ssb.no at 08:00 am. Prior to this, a minimum of three months' advance notice is given in the Statistics Release Calendar. This is one of Statistics Norway’s key principles for ensuring that all users are treated equally.

The statistics on environmental economic instruments follows the same definitions as used in the national accounts (ESA 2010 and SNA 2008).

Total figures are comparable with the General government income and revenue statistics and the National accounts. There is a few more time adjusted taxes in the statistics on environmental economic instruments than in the General government revenue and expenditure statistics, but this will be harmonised by the next publications.

The industry breakdown that is used in the statistics on environmental economic instruments follows NACE rev 2, and is consistent with the industry breakdown used in the national accounts, energy accounts and in the air emission accounts.

Not relevant.

From 2013 the statistics is part of the obligatory reporting to Eurostat (EU-regulation 691/2011 on environmental economic accounting).



The scope of the reporting obligations is given in Prop. 147 S (2011–2012) The Ministry of Foreign Affairs (in Norwegian only).

The statistics covers the general government revenues by instruments defined as either environment taxes or environmental related taxes. The taxes are broken down by different categories and further divided by industries and household in accordance to whom have paid the taxes.

The data used in the statistics on environmental economic instruments are mainly based on statistics already prepared by Statistics Norway by the division for energy and environmental statistics, the division for national accounts or the division for general government finances. However, some data from the Norwegian Tax Administration and the Norwegian Environment Agency is used.

Data collection:

The statistics on environmental economic instruments is mainly based on already existing data from the national accounts and statistics covering the general government income. With the exception of some data received from the Norwegian Tax Administration, the statistics on environmental economic instruments does not have any specific external data collection or survey.

Newly introduced taxes in the annual Norwegian State Budget are annually included in the General government income and expenditure statistics by the division for general government finances. The division for energy and environmental statistics prepares some of the basic input data for environmental taxes that are used in the national accounts and/or General government revenue and expenditure statistics. Examples are the CO2- and NOx-component of the motor vehicle registration tax and the purchases of emission permits by industries.

Editing:

The division for energy and environmental statistics has the responsibility of quality controls and editing of the statistics on environmental economic instruments.

Total environment- and environmentally related taxes can be checked against figures from the general government income and revenue statistics. The industry breakdown can by the next publication be controlled against earlier years’ time series. Other quality checks include checking tax rates and tax exemptions.

In the reporting of figures to Eurostat, it is obligatory also to fill out a quality report in accordance to the article 12(1) in EU-regulation 223/2009.

Calculations:

The starting point for the estimations of the statistics on environmental economic instruments is the general government revenues defined as taxes in hence the general government income and revenue statistics and in the national accounts. These taxes are based on the recorded book value of tax revenues that have been received by the government and are identifiable the annual Norwegian State Budget. The exception is the CO2- and NOx-part of the motor vehicle registration tax and the purchases of emission permits, which are estimated values and not identifiable values in the Norwegian State Budget. Time adjustments of the recorded book values have been undertaken for those taxes where available monthly and/or quarterly payments exist.

Whereas the totals of the taxes are based on recorded values from the annual Norwegian State Budget, the division of taxes by industries and households are estimated based on statistics and accounts including consumption figures of the products that are levied with an environmental tax.

The distribution of taxes by industries follows the accounting principles of the National accounts. This means that the tax is distributed to the final purchaser or owner of the product levied with the tax. Industries and activities that are excepted from a tax or face reduced tax rates are taken into account in the calculations.

The method used for the distribution of taxes by industries varies between taxes on products and taxes on production, and also in accordance to the need of sorting out the environmental part of taxes that consist of both an environmental part and a fiscal part.

Estimating the CO2- and NOx-components of the motor vehicle registration tax and the purchases of emission permits

The purchases of emission permits are estimated with the use of information on the number of submitted permits for enterprises in Norway. The permits are purchased in order to account for the emissions in the enterprises. For those enterprises that have received more permits than their actual emission, the number of purchased permits is set equal to zero. The permits are then multiplied by a weighted average market price collected from the international stock exchange, InterContinental Exchange (ICE).

From 2014 figures the CO2 and NOx components in the motor vehicle registration tax is received by the Norwegian Tax Administration by each registration of a new vehicle in Norway. To allocate the taxes to the correct industry, the vehicle registry is used in combination with the business register. For figures before 2014, the components were calculated based on information about the vehicles received from the Tax Administration and the vehicle registry, in addition to information on tax rates.

Not relevant

The general rule for publication is that data cannot be released unless they contain information from at least three or more participants (i.e. industrial enterprises).

Annual comparable figures distributed by industries and households exist for the years back to 2008. Annual comparable total tax figures distributed by type of tax and by aggregated tax groups exist for all years back to 1995.

International definitions, in addition to guidelines for calculation and reporting of emission data, lead to comparable emission inventories in the different countries.

The statistics on environmental economic instruments are based on already existing statistics and accounts. The total figures are consistent with both the National accounts and the General government income and revenues statistics. Possible sources of error and uncertainty are mainly relevant for the division of taxes by industries, where many different data sources are used. These sources may contain data from different registers or data reported from enterprises. The results from the models used for the industry breakdown will therefore reflect the uncertainties in the source material and the calculation methods that are used.

Go to Principles for revisions for more about revision in Statistics Norway.

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