Investigating Effects of Green Taxes on Investments in Renewable Energies: The Case of the UK

Abstract

This research paper seeks to explain and analyse the effects of green taxes on investment in renewable energies in the case of the UK. As climate change is challenging the world, different measures and instruments have been implemented to tackle it. The implementation of green taxes on environmental pollution is one example. Even though green taxes aim to reduce greenhouse gas emissions, they also affect investments in renewable energy projects both positively and negatively. Firstly, the topic is seen in the context: The UK energy targets and green taxes are described and the connection between environmental taxes and investments in renewable energies is discussed. This is followed by a discussion and analysis part, which is achieved by collecting and evaluating qualitative and quantitative secondary data that mainly comprises governmental documents, newspaper and academic articles as well as numeric statistics and graphs. It can be seen that on one hand, green taxes, besides cutting on emissions, encourage investment in renewable energies as they put particularly energy intensive organisations under pressure to use more renewable sources, which means that companies will have to change behaviour and fall back on renewables. On the other hand, it can likewise be seen that green taxes come along with negative side effects. This is due to how taxes are implemented and how politicians do not agree on how to handle them. They lead to high energy bills and can have a deterrent effect on investment in renewable energies as companies may choose to obtain more reasonable energy from other countries and sources.