Who will bear the burden of the CO2 tax?

The question remains however who will ultimately pay the bill. According to Peter Kavelaars, Professor of of Fiscal Economics at Erasmus School of Economics, the consumer will in the end bear this tax burden. The two agencies calculated the consequences of the 600 proposals in the climate agreement, which encompasses the Dutch contribution to fighting global warming. The government wants to reduce CO2 emissions by 49 percent by 2030, when compared to 1990. This amounts to a reduction of about 48.7 megatons of greenhouse gas emissions. According to the PBL, the existing plans will result in a decrease of between 31 and 52 megatons, but the PBL considers it unlikely that the government's goal of 48.7 megatons will be reached.

The industry itself is very much set against a CO2 tax, while environmental organisations, trade union FNV, and left-wing parties like GroenLinks and PvdA have been calling for such a tax for months. According to Professor Kavelaars, taxes pose extra costs for companies and as such, companies want to avoid paying these by themselves. Even though they will have to pay for these taxes themselves directly, they will try their best to pass on the burden of these taxes to consumers by increasing their sales prices. So, in the end, it wil be the consumers that will be worse off. As such, the introduction of the tax will not necessarily cause companies to leave the Netherlands. This is even more true because it is expected that more countries are going to introduce a CO2 tax in the near future.