FinTech Glossary

What Is Green Levy

A green levy is a tax or charge imposed by governments or regulatory authorities to discourage environmentally harmful activities and promote sustainable practices. It is designed to reduce pollution, lower carbon emissions, and encourage responsible use of natural resources.

Policy Context

Green levies are part of environmental and fiscal policy frameworks aimed at addressing climate change and environmental degradation.

They are applied to activities, products, or services that have a negative environmental impact, such as high carbon emissions or excessive resource consumption.

The goal of a green levy is not only revenue generation but also behaviour change by making environmentally harmful activities more expensive.

Types of Green Levies

Green levies may take different forms depending on policy objectives, including:

1. Carbon taxes on emissions
2. Levies on fossil fuels or energy consumption
3. Environmental surcharges on polluting industries
4. Waste disposal or landfill charges
5. Plastic or packaging levies
6. Emission-based transport taxes

The structure and rate of these levies vary by jurisdiction.