By Luis Gilberto Murillo*

Jardín, Colombia by Pedro Szekely / Flickr / Creative Commons

Colombia has provided important leadership in implementing integrated, pro-environment taxes in the country, but there is urgent need for it to do more.  In 2017, Colombia became one of three countries with the greatest advances in implementing fiscal mechanisms to control emissions, one of the principal tasks on its agenda for full membership in the OECD.  But experts believe that the deepening of the global socio-ecological crisis caused by climate change demands broader, accelerated fiscal mechanisms to protect the environment and sustainable development.

• In 2015, Colombia, as part of its Paris Agreement commitments, set the goal of reducing greenhouse gases by 20 percent by 2030. A recent report by the Comptroller General of the Republic concluded that the Colombian national economy will need to undergo a significant restructuring to meet that goal and make the country resilient in the face of extreme climate events such as floods and droughts.  The Comptroller report opened the door to discussion of fiscal tools for action and environmental protection, with special priority given to controlling deforestation, water conservation, and improving air quality. Environment taxes on carbon, plastic bags, and motorcycles with motors above 200cc have been a starting point, but the Comptroller assesses that they haven’t been effective enough.
• The government today has much greater resources – more than 700 billion Pesos (about US$227 million) per year – than before. Moreover, the launch of Colombia’s unique voluntary carbon market, bringing important projects and a flow of resources to rural and ethnic minorities (Afro-Colombians and Indigenous communities), has already demonstrated the positive impact of green taxes.  The program to tax plastic bags has reduced their use by 30 percent in just the first year of implementation, 2017.

Debate over how and where to invest the resources created by environmental taxes will certainly be important.  Most observers believe that the central criterion should be how well projects change the attitudes and behavior of those involved.  Projects will be key, but the contribution of each individual to save the planet will be even more important.

• The recent finance law, introduced by the current government and approved by Congress, missed a valuable opportunity to adjust existing green taxes and create new ones, especially regarding progress in promoting electric vehicles, innovative renewable energy production, and control over the use of plastics other than bags. Upcoming legislation provides ample chances to expand environmental taxes to achieve these goals.  A better balance between various taxes – on capital and labor on one hand, and pollution and environmental degradation on the other – could lay the foundation for progress.

The gains made thus far underscore the importance of having a strategic vision and discipline.  Improvisation will fail; steady work, technical rigor, and political wisdom are required for progress.  An important first step will be the designation of a technical mission to head the National Planning Department, which is charged with leading and coordinating the country’s development agenda in the medium and long term.  Such a technical mission, along with the Comptroller team, can guide public debate and keep it squarely on the national public agenda.

March 1, 2019

* Luis Gilberto Murillo is a CLALS research fellow and former Minister of Environment and Sustainable Development of Colombia, with almost 30 years of experience in the areas of environment, sustainable development, and peace building.