Green Levy

DEFINITION of 'Green Levy'

A tax imposed by a government on sources of pollution or carbon emission. A green levy is aimed at discouraging the use of gas guzzlers and inefficient sources of energy, and encouraging the implementation of environmental-friendly alternatives. The term is most commonly used in relation to a tax on fuel-inefficient vehicles.

BREAKING DOWN 'Green Levy'

For example, a green levy introduced in Canada in March 2007 is applicable to new passenger vehicles such as cars and SUVs that have a fuel consumption of 13 liters (approximately three gallons) or more per 100 kilometers (about 62 miles).

Some critics of green levies claim that they amount to stealth taxes that hurt consumers by pushing up vehicle prices, but do little to curb emissions.

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