Why & How

WHY?

The sectors of the economy that fall outside the scope of the EU Emissions Trading System (EU-ETS) account for almost 60% of the EU's total domestic emissions of greenhouse gases. The non-ETS sectors include among others, transport, buildings, agriculture, non-EU-ETS industry such as the tertiary sector, and in most of them the renewable energy sources need to increase dramatically. In the MED countries, the local and regional authorities intervene in the regulation of such sectors through different tools. Among the economic and market based tools, the fiscal policies have an impact in terms of fiscal collection and are a lever to influence behaviours of taxpayers. The fiscal incentives are more sustainable than direct subsidies and the fiscal disincentives contribute to fix the “right prices” for products and services. Actually, according to the European Green Deal: “The different pricing instruments must complement each other (...) Ensuring that taxation is aligned with climate objectives is also essential”. Furthermore, according to the OECD, the tax arrangements play a key role to face the COVID19 budgetary crisis of the subnational governments and it is essential to align such subnational tax reforms with the climate objectives and ensure a green post-COVID19 recovery.

Even if in the 2002-2014 period the number of national environmental taxes in the EU has increased, the green taxation at local level is still largely unexplored. LOCAL4GREEN Project (2016-2019) proved the feasibility and the maturity of the local environmental taxation to promote RES designing 173 green fiscal policies in 78 municipalities, of which 79 policies were adopted by 34 municipalities.

LOCAL4GREEN PLUS Project will transfer the achieved results by LOCAL4GREEN, mainstreaming the tested green fiscal policy models in the plans and policies of new MED Local Authorities.

HOW?

LOCAL4GREEN PLUS will support Local Authorities to implement innovative local fiscal policies, intended to promote renewable energy sources, by capitalizing the green fiscal policies described by the “International Handbook on Green Local Fiscal Policy” produced by LOCAL4GREEN.

Priority will be given to the Local Authorities members of the Covenant of Mayors in order to contribute to accomplish their climate change mitigation goals set in the SECAPs. In rural areas and islands, local fiscal policies have a key role to increase renewable energy sources since such policies easily address the Non-EU-ETS sectors that are responsible for most of the emissions of these areas. The green fiscal policies will promote private sector engagement in renewable energy sources and will be a lever to modify the tax-payers behaviours and investments preferences, increasing the share of renewable local energy sources, such as expected by the Specific Objective 2.2 of the Interreg MED Programme.

The project will provide Local Authorities with training and technical support to adapt and adopt the most relevant fiscal policy models systematized by the “International Handbook on Green Local Fiscal Policy”, in order to be included in their own regulation, strategies and plans, especially in the framework of the Covenant of Mayors.

Two former partners of LOCAL4GREEN (FVMP and MUSOL) are involved as giver partners in LOCAL4GREEN PLUS, and jointly with the giver associated partners municipalities will ensure the transfer of the policies to four associations of municipalities involved as receiver partners. The receiver ones will amplify the capitalization process and will work with receiver associated partners municipalities that have expressed their interest in implementing green local taxation and will concretely implement the capitalized policies.