Challenges of urban areas for land use, CO2 emissions and climate resilience: the role and environmental reform of local taxes and charges

Abstract

Urban areas present specific challenges for land use, CO2 emissions, climate change and other environmental effects. Spanish local taxes provide tax incentives for local authorities to implement clean energy. This chapter proposes reforms to improve local environmental tax incentives. We also suggest a reform of the circulation tax to turn it into a proper environmental instrument and discuss how to introduce new local taxes related to carbon emissions of immovable property. Finally, the Spanish Act on Waste and Contaminated Soil (2021) gives local entities a three-year deadline to turn current waste charges into environmental instruments to grant a circular economy. This reform implies covering the total cost of the services and implementing pay-as-you-throw systems. We approach how to implement such reform.