Sustainability in the production of goods and services could be encouraged by replacing value-added tax (VAT) with ‘DaVAT,’ a damage and value-added tax, a new study suggests.
This tariff is partly based on a life-cycle assessment (LCA) of goods and services and varies from high (products deemed to seriously harm the environment and human health) to low (those with a lesser impact). The researchers propose a novel way to convert VAT into DaVAT and provide a new policy tool, based on LCA, that can be applied by any country wishing to reform its consumption tax system and move towards a more sustainable future…read more.