'Green taxes' are at their lowest level in real terms for almost a decade, according to a new report.

The Institute for Fiscal Studies claimed the government now receives a smaller share of both national income and tax receipts from environmental taxes than when it was elected in 1997, despite there being a greater number of green taxes than ever.

While revenue from green taxes such as the climate change levy and the aggregates levy stood at historic lows, total carbon dioxide emissions have risen, according to the think-tank's report, The UK Tax System and the Environment.

Author of the report Andrew Leicester explained the drop-off in receipts as a consequence of the abolition of the fuel price escalator in 2000 and the emissions trading schemes.

Receipts from environment taxes dropped to 3.4 per cent of national income in 1997 to 2.9 per cent in 2005, this report noted.

Total revenues from green taxes rose from £27.3 billion in 1997 to £35 billion in 2005. Revenue highs were recorded at £37.7 billion in 1999.

But after taking inflation into account, real revenues in 2005 increased by only £2 billion over the same period.

Mr Leicester said Gordon Brown, the chancellor, could face pressure to increase green tax revenues.



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