Green policy instruments

The government can choose from various policy instruments in order to steer economic development towards green growth. These include green taxation, environmental subsidies and environmental regulations. Monitoring the size and effects of these instruments is important to determine the effectiveness and cost-effectiveness of policies.

As part of the theme of green policy instruments, two indicators display high scores. These are the tax rate on energy, which has increased sharply since 2000; and the share of environmental expenditure as a percentage of GDP, which has increased, albeit slightly.

The share of environmental subsidies in total government expenditure has remained stable. However, the budget for the main renewable energy subsidy (SDE) increased fivefold between 2011 and 2016. In addition, separate offers for large offshore wind farms have been announced. Standards for new houses, cars and appliances are also important contributors to a greener economy. These standards are often established under European legislation.

The share of environmental taxes and levies in total taxes and social contributions in the Netherlands has declined in recent years. Nevertheless, the Netherlands has one of the highest rankings in Europe on this indicator, mainly as a result of the high taxes on pollution and transport. In addition, environmental expenditure is one of the highest in Europe as a result of stringent policy measures.