Environmentally counterproductive subsidies
In addition to taxes, subsidies are an important instrument that the state can use to intervene in the market in order to steer production and consumption decisions in the desired direction. The reasons for this are manifold and include economic and socio-political goals: The energy tax rebate was introduced to support the competitiveness of energy-intensive companies against the background of new energy taxes, while the commuter allowance is intended to compensate for the burden of commuters' travel costs.
However, some of these subsidies encourage environmentally harmful behavior and have counterproductive effects on the environment, which is why they should be questioned from an environmental policy perspective. The energy tax rebate can, for example, reduce the incentive for energy-efficient production, while the commuter allowance violates the polluter pays principle, according to which those who cause environmental damage (CO2 emissions) have to bear the full costs. In addition, such subsidies can distort the market and competition and tie up budget funds in areas that would no longer be viable without the subsidy. On the other hand, due to the steering effect of subsidies, their ecological design can make a significant contribution to the conversion to a low-carbon society. Subsidies that are harmful to the environment and the climate in particular should therefore be phased out.
The elimination of environmentally harmful subsidies and their reform have long been on the international political agenda. The reduction of environmentally harmful subsidies is included in various strategies worldwide, such as the UN Agenda 2030 "Sustainable Development Goals" (2015; goal 12c), the EU strategy Europe 2020 for smart, sustainable and inclusive growth or the "Roadmap to a resource efficient Europe".
In Austria, as part of the climate and energy strategy #mission2030, it was stipulated that subsidies that conflict with the climate and energy goals should be examined.
The most common definition of environmentally counterproductive or harmful subsidies is that of the OECD. It describes these as subsidies that are at odds with environmental compatibility, i.e. have a negative impact on soil, water, climate, biodiversity, human health and natural resources. In this context, a subsidy can be seen as a government benefit for consumers or producers that increases their income or lowers their production costs.
Environmentally counterproductive subsidies therefore offer an incentive for environmentally harmful products, production, consumption or other behavior and lead to more emissions, waste, pollution or resource exploitation.
Regulations (EU) No. 691/2011 and 538/2014 created a common framework for the preparation of European environmental accounts. The recording of environmentally-related transfers is explicitly listed in this EU regulation under other possible modules. While considerations on expanding environmental accounts have until recently focused on recording environmentally friendly subsidies, at the instigation of some Member States (including Austria and Sweden) EUROSTAT is increasing its efforts to collect data on environmentally harmful subsidies at European level to improve.
As a first step, EUROSTAT has planned a voluntary pilot survey on environmentally counterproductive subsidies in the member states for the end of 2019 in order to get an overview of the availability of the data.