How are governments deploying biodiversity-related taxes?

In the OECD area, biodiversity-related taxes raised USD 10.9 billion in 2020, representing a small but increasing share (1.3%) of all environmentally related tax revenue (ERTR). The bulk of revenue is raised from taxing pollution (46%) and resources (35%), while energy and transport tax bases play a minor role in generating revenue.

Overall, the share of ERTR continues to decline in OECD countries, amounting to 5% of total tax revenue in 2020, down from 5.9% in early 2000s. Compared to GDP, ERTR is also decreasing, reaching 1.5% of GDP in 2020.

One reason for this is that tax rates are typically levied as nominal terms (e.g. per litre), which, without inflation adjustment, decrease in real terms over time (exceptions being Denmark, the Netherlands and Sweden).

Explore: Environment at a Glance Indicators – biodiversity