Cambridge Econometrics has modelled the impacts of a tax shift scenario in the period 2016-
2020 in 27 Member States of the European Union using the E3ME macro-econometric model.
The GDP and employment results are positive in each of the 27 countries. In 2020, GDP levels are
on average 2.0% higher and employment levels are 2.9% higher than business as usual. This
means that 6.6 million more people are in employment.
Based on the modelling results, Trucost assessed the integrated impact of the scenario on
financial capital, natural capital and social capital. The Ex’tax Integrated Value Added Statement
includes the financial capital value (economic growth), as well as the external benefits to society
in terms of social capital (the health impacts of employment versus unemployment) and natural
capital (health impacts of lower carbon emissions, reduced pollution levels because of lower
energy resource use and water savings).
These findings suggest that a tax shift from labour to natural resource use and consumption is a
viable strategy to align tax systems with the Europe 2020 Strategy and the Sustainable