To achieve global sustainability, there is a need for holistic and urgent revamping of such tax structures. The 2022 Declaration can contribute to developing this process. As revenue generation is imperative and indispensable for governments, policies should be promulgated where environmentally negative externalities should be taxed, while the positive outcomes of honest human actions with positive externalities should be rewarded. This would mean that actions that promote negative externalities, including wastage of water, generation of solid industrial and municipal waste, air pollution through industrial activities, or otherwise, change in land use from environmentally beneficial ecosystems to industrial or residential and the like, need to be taxed. Such taxes, gradually, would reflect a change in value systems and behavioral patterns of the population. This would also directly disincentivize citizens towards undertaking actions that would have negative consequences on the environment.
A common example of such a taxation regime is the carbon tax, where the emitter is taxed based on the amount of carbon (carbon dioxide) that is directly put in the atmosphere by him. A carbon tax can theoretically create a net gain to world society over the long term as it provides an incentive to reduce emissions directly and encourages the search for alternatives to carbon energy (Helm, Dieter, The Carbon Crunch, New Haven, Yale University Press, 2012). A more basic principle under which the carbon tax could be clubbed is the Polluter-Pays principle. It is the principle used to allocate costs of pollution prevention and control measures to encourage rational use of scarce environmental resources and to avoid distortions in international trade and investment. It needs to be strengthened in the context of the 2022 Declaration but also adapted to consider the regime overhaul suggested in this article. For instance, the owner of an internal combustion engine vehicle may be taxed higher in terms of the registration fees and road tax, fuel prices, parking tickets, and the like, while the owner of an electric vehicle may be given proportional rebates.
Of course, valuing negative environmental externalities comes with its own set of challenges. How does one value the cost of carbon put in the atmosphere, where it could cause physical impacts on health, cognitive abilities, focus, and increase in human errors? The concept of ecosystem services adds to this debate. These services can be seen as contributions of ecosystem structure and function (in combination with other inputs) to human well-being. Furthermore, much like financial risk management, which governs the price and demand of a financial utility, environmental risk management also would imply and govern the fluctuation of the cost of a specific externality that embroils the mechanism further.
These arguments, about the complexities of a possible overhauling of global tax regimes to reward positive actions that lead to human income, and tax actions that generate negative environmental externalities, are not new and commonplace for every amendment and new provision. What is required, and what the 2022 Declaration should promote, is an approach that looks to reestablish consumer, industry, and supply chain behavior to reflect the true environmental cost of that action. Human beings have exploited the environment for too long, and the solution lies in the market dynamics of taxation and incentivization in favor of sustainable living.