At present there are more than 30 countries that have some type of carbon tax in effect. Environmental accounting (or costing) is a broader term than just a carbon tax on energy. For example, subsidies being provided to energy producing industries are a form of negative tax. Removal of such subsidies has the same effect as a carbon tax, which is to raise the price of energy to the user. Such methods make more energy efficient alternatives more financially attractive.

In the recently released "OECD Environmental Strategy for the First Decade of the 21st Century" the goal is to include “cuts to energy, farm and other subsidies so prices more accurately reflect environmental impacts”. China, the U.K., India, Indonesia and Thailand are countries that have recently eliminated subsidies to parts of their energy industries.

Will environmental costing continue to spread? Environmental costing is an estimated cost for resource depletion and environmental deterioration. One can only guess. It is intuitively attractive to tax something bad, i.e. environmental damage rather than something good such as one’s salary or company’s profits.

As a building owner, facility engineer or factory manager the implications are enormous. Just how much could energy prices change? According to European Research Commission Report released in July of this year “The cost of producing electricity from coal or oil would double if costs such as damage to the environment and health were taken into account”.

Coal subsidies in China have been more than halved since 1984, and nearly 1 million coal-mining jobs have been eliminated over the past five years as a result of far-reaching coal reduction initiatives. In 1999 alone, total coal use in China dropped 4.4%. Petroleum subsidies fell from 55% in 1990 to 2% in 1995. Source: EIA April 2001.