The alarm bell has begun to ring as the world awakens from its slumber, turning its attention to the preservation and protection of the environment from the pollution affecting both industrialized and developing countries, which has led to the emergence of sustainable development ideas. To achieve sustainable development, important measures must be taken to combat environmental pollutants and preserve natural resources for the well-being and happiness of current and future generations. The world has come to realize that environmental pollution is a direct result of economic development for two reasons: first, the production of materials that cause pollution, and second, the exploitation of natural resources without considering their scarcity and the rights of future generations. A significant number of economists have been instrumental in establishing mechanisms that guide economic policies managed by public authorities to limit and reduce pollution while achieving sustainable development. One of the most important of these mechanisms is the implementation of green taxes (environmental taxes), which have become globally recognized under the principle that “the polluter pays.” Green taxes contribute to environmental protection by imposing deterrents on polluters or offering incentives, such as tax exemptions, to encourage environmentally friendly practices. Many countries around the world have recognized the importance of these taxes for protecting the environment and reducing pollution. The first significant step was taken at the Stockholm Conference in 1972 in Sweden, followed by the publication of the Brundtland Report titled Our Common Future in 1987 by the World Commission on Environment and Development (WCED), which marked a qualitative shift in the concept of development by emphasizing the need to meet society’s needs without endangering the rights of future generations to natural resources. This led to the Earth Summit in 1992 in Rio de Janeiro, where Principle 16 of the Rio Declaration was adopted, reinforcing the “polluter pays” principle, prompting many countries to implement environmental tax reforms without compromising public interests. Examples of green taxes include taxes on services and products that pollute the environment, energy taxes on fossil fuels such as carbon taxes imposed on specific fuels that emit carbon oxides (including oil, gas, and coal), transportation taxes on vehicles that run on diesel, waste taxes to cover the additional costs of waste disposal, and product taxes on economic units that pollute the environment and cause social harm. On the other hand, tax incentives are tax measures implemented by tax authorities, including granting financial benefits such as tax exemptions, deductible expenses, reduced tax rates, and, finally, tax refunds.
