KemI: "Taxes on chemicals can be used to reduce risks"
Mattias Carlsson Feng from the the Swedish Chemicals Agency (KemI) attended a FRAM-seminar on Tuesday. He talked about the new proposal of tax on cadmium and plant protection pesticides.
What’s the conclusion after your investigation?
– The conclusion is that taxes on chemicals can be used to reduce risks. But also that it is quite a complicated area of study and that we need more academic research how tax could work and how we could design it. But also just trying it out to see what comes out and evaluate.
For pesticides, it is very hard to quantify economic benefits. We can see that in theory they should bring some economic benefits because of reduced risks. For cadmium we have tried to quantify the economic benefits and they came out as quite small. Not because cadmium itself is a small problem, but because the flow of cadmium to our cultural land is much smaller than the stock that is already in the land, which causes a lot of problem.
So, what is your recommendation, should we introduce this tax on cadmium?
– That is my recommendation, yes. But we should also look at other policy measures to reduce the cadmium that is already in the land.
What about the tax on plant protection pesticides?
– We can see a small reduction in risk, or potential reduction in risk. We also see a need to evaluate this after a couple of years, after it’s introduced, to see if the tax levels should be changed and what the actual effects are.
Background and FRAM's view of the proposal:
Hazardous chemical substances in products, goods, and buildings can end up in the environment and affect plants, animals, and humans. In order to protect human health and biodiversity, the use of hazardous substances needs to be prevented and reduced. To achieve this, the government has recently proposed a tax of SEK 200 per gram of cadmium in sewage sludge, animal feeds, lime, and mineral fertilizers containing phosphorus.
The proposal also includes a tax on pesticides, which will be differentiated in three categories based on the EU classification of active substances in the Plant Protection Products Regulation. Candidate substances for substitution will be charged with SEK 30 per highest allowed hectare dose. Active chemical substances with low risk for human health and the environment will be exempted from taxation. The intermediate category of substances will be charged with SEK 15 per highest allowed hectare dose.
FRAM supports the implementation of the proposed taxes. Nevertheless, we believe that several aspects of the proposal could be clarified. In particular, a more thorough motivation of the environmental costs and benefits should be considered in order to analyze the consequences in more detail. The expected reduction of cadmium anticipated by the proposal is relatively low (10-30 kilos) and the expected generated revenues are also relatively low (25.3 million). Although there are potential benefits from implementing a tax on cadmium, alternative policy instruments should also have been considered.
Regarding the tax on pesticides, we fully support the implementation of a risk differentiated tax. Nevertheless, the argument that hectare dose reflects risk is not sufficiently motivated since even if it is administratively positive to use hectare dose due to availability of such data, hectare dose does not reflect the environmental impact.
To discuss the current proposal, FRAM researchers organized the seminar entitled How can taxation contribute to a non-toxic environment?. The seminar took place the 20th of March, 2018. Mattias Carlsson Feng (from the Swedish Chemicals Agency, KEMI), presented an overview of the current legislative proposal, and how it is expected to contribute to a non-toxic environment. FRAM discussed some important aspects of the proposal.