Green tax reform will benefit Denmark's economic recovery: report

By UnreguserLin Jing

COPENHAGEN, Oct. 20 (Xinhua) -- It is possible to simultaneously manage the current economic crisis caused by COVID-19 and invest in a faster, more comprehensive green transition in Denmark, according to a new report released on Tuesday by the Chairmanship of the Danish Economic Councils, an independent economic advisory body.

The in-depth review, also known as the "Sage's Report," noted that the outlook for Denmark's economy crucially depends on how the COVID-19 pandemic advances both domestically and in the world.

It said that Denmark's gross domestic product (GDP), strongly affected by the pandemic, was expected to fall by 3.6 percent in 2020.

Back in June, the "Sage's Report" predicted a 4.4-percent GDP drop for this year.

Unemployment expectations for the end of 2020 were also revised from 150,000 to 130,000 in the new report.

The twice-yearly report highlighted the benefit of green tax reforms used to encourage more climate-friendly behavior among citizens and businesses.

"Targeted taxes, for example in the form of a uniform tax on greenhouse gas emissions across all sectors, is the best way to achieve the objectives of the climate policy, because they efficiently affect the behavior of businesses and households," said the report.

Akademikerne, an independent umbrella organization for 28 professional organizations in Denmark, echoed the Economic Councils' idea on green tax reform.

"It is worth noting that investing in green research not only provides a clear gain over the years but can actually contribute to get the economy going again," commented Lars Qvistgaard, chairman of Akademikerne, in a press release on Tuesday.

"It is important that we become better at creating the right incentives for citizens and businesses to think green, and here a green tax reform can be a good initiative, although we must also keep an eye on the distributional effects of this."

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