Michael A. Mehling
26 Tax Notes International (2000): 871
This article examines the design, implementation, and early implications of Germany’s Ecological Tax Reform, introduced between 1999 and 2000 as a multi-stage restructuring of energy taxation. It provides a detailed overview of the legal architecture of the reform, including the introduction of an electricity tax, increases in mineral oil taxes, and an extensive system of exemptions and rebates aimed at mitigating competitiveness and social impacts. The analysis situates the reform within broader debates on market-based environmental policy instruments, particularly the promise of a “double dividend” through environmental improvement and reduced nonwage labor costs. The article also assesses the political controversy surrounding the reform, its interaction with German constitutional law and European Union legal constraints, and the principal objections raised by industry and opposition parties. Finally, it evaluates practical and distributive concerns, concluding that while ecological taxes are no panacea, they represent a potentially valuable complement to traditional regulatory approaches if implemented cautiously and transparently.
Keywords: Ecological Tax Reform; Germany; Energy Taxation; Double Dividend; Fiscal Policy; Climate Mitigation