Taxes have been around so long that, along with death, they’re the only certain thing in life. Civilizations throughout history from the ancient Egyptians to the Roman Empire to most modern countries levy taxes of various kinds on citizens and businesses in an effort to generate revenue for governments as well as structuring prices for goods.

 

When it comes to the environment, taxes are used to either place a cost on environmentally harmful practices and products or provide a benefit to those practices and products that are environmentally beneficial. For instance, taxes are levied on high emitters of greenhouse gases while consumers who buy electric or hybrid vehicles are given tax breaks.

 

In this way, taxes help compliment or guide environmental regulatory policies by encouraging companies to engage in more environmentally friendly practices to avoid additional taxation and by incentivizing consumers to be more environmentally conscious in their purchases.