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I am reading up on Environmental Impact Assessments (EIAs). I have learned that for every project an EIA is to be done after a careful assessment which includes screening, scoping, impact prediction, assessment of alternatives, public hearing, environment management plan, monitoring the clearance conditions.

However, I'm confused by this information from the book that I am reading:

Hon’ble Supreme Court of India has directed all manufacturers/dealers of Delhi-NCR ( National Capital Region ), selling diesel cars with engine capacity 2000cc and above, to pay 1% Environmental Protection Charge ( 1% of Ex-Showroom price of the vehicle ).

If efforts have been put into clearing a project to develop, why would the government now collect such a charge above the taxes that the company is already liable to pay?

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    This question has more to do with politics than earth science. All governments want more money! Environmental charges & carbon taxes are ways to get more money. Ideally the money would be on environmental matters such as fixing existing problems due to past errors or transgressions, providing incentives for environmentally sound practices, better waste management, etc. Sometimes some or all of the money raised goes into consolidated revenue instead. It's also a way for companies to feel good & say they are doing something for the environment when they're not do much at all. – Fred Jan 11 at 16:43
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Typical reasons:

  • The funds earned are directly earmarked to initiatives related to the taxed concept. It goes to pay a public organism (or even NGOs) that do some environmental work (planting trees, controlling air pollution, development of public transit works).

    One issue here is that money is fungible; if there already exists such organization and gets $X from the public budget, with this tax a part of those $X will not have to be provided by the government and so the end result is that the "surplus" money is available to other issues. In the end it depends in if in your opinion such initiatives must be paid from the taxes "general funds" or if those affected by the tax should pay more as those initiatives are "cleaning up" or compensating the externalities caused by those taxpayers.

  • The objective of the tax is not so much to get funds (which are anyway always welcome) than to deter people from taking the "wrong decission". If cars that are more polluting are taxed more, then it gives the public an incentive to buy less polluting cars even if they are somewhat more expensive1.

    Anyway, in this case a 1% seems very low to substantially affect purchasing patterns; a $20.000 car would become a $20.200 car. But it could be seen as a kind of a soft "first warning" to the public about the government making it clear that it wants to act against diesel cars and will probably do in the future.

  • The objective of the tax is just to increase the taxes collection, and the environmental name of the tax is just a disguise to make it less unpopular.

    Here it would be interesting to know how much revenue this tax is expected to bring in (how many of those cars are sold) and how does it compare to other sources of income; a 1% does not sound like much money, specially if it is so targetted that people have the option to buy a gas car or just a 1995 cc diesel car.


1Here is some discussion about the ability of taxes of changing consumer behavior: https://politics.stackexchange.com/a/31115/6259

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In essence this is one of the many money laundering schemes which many federal, state and local governments are now involved with. The simplified concept works like this:

Step 1 Legislature passes law or alphabet agency writes regulation. Contained in the law are provisions for the allocation of funds collected through the "tax".In most cases there are NGOs(foundations) involved, which operate under the guise of "philanthropic" work.The NGO is listed as beneficiary of a certain percentage of the funds or are awarded contracts for related services. In this case the foundation(s) are likely environmentally focused.

Step 2 Owner of the NGO furnishes campaign contributions to the legislators who wrote and passed the law. Of course there's multiple variations of this theme that occurs and the money may flow through multiple NGOs before it gets paid out, but if you follow the money trail it often times gets paid directly to the politician or official, not just to campaign funds.

This is one of the many ways that Congressmen rack up enormous net worths while they are in office. Foreign Aid often times works in a similar fashion, a percentage of that money the US government is paying out gets kicked back.

Have you ever wondered how some members of Congress go into politics with basically a zero net worth and 5 years later are worth $10 million, making $150-175,000/year? Well it is hustles, just like this one.

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