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Recent environmental assessments have highlighted the extent of land degradation inAustralia and the significant costs involved in addressing it. With projected investment costsrunning into tens of billions of dollars, it is not surprising that greater attention is now beingfocussed on who should pay. One idea gathering significant momentum has been theimposition of an environmental levy. Such a levy would raise public funds to be spent onresource degradation issues and has been proposed to work through the taxation system in asimilar fashion to the Medicare levy, albeit for a more limited 10 year period.The paper assesses the arguments behind the imposition of an environmental levy andconsiders some of the issues associated with its effective implementation. Particularchallenges in the establishment of environmental priorities, public and private attributes ofenvironmental problems and the institutional arrangements for levy collection andmanagement are identified and discussed.
