How Taxes of Local Governments Can Contribute to Climate Goals

Local governments have endorsed the national Climate Agreement and the climate goals included therein. In addition, many local governments have also concluded local climate agreements and formulated their own climate goals.
To achieve their climate objectives, local authorities not only need policy space, but also legal powers and financial instruments to fund these policies, such as taxes. In this article, we explore if and how existing taxation by local governments in the Netherlands could play a role in achieving climate goals.
In this article, we will investigate the following questions:
- What roles can (local) taxes in general play in pursuing climate goals? (Section 2);
- Which factors within the current Dutch context are limiting and which are contributing to the effectiveness of the use of local taxes in the pursuit of climate goals? (Section 3);
- What insights does this analysis provide and to what extent can these also be relevant outside the Dutch context? (Section 4)
The article ends with a conclusion (Section 5).