CBI, a business lobbying organisation, has published a new report in which it urges the UK government to take up an independent review of its current environmental tax landscape.
In its report, entitled 'Solving a Taxing Puzzle: Making environmental taxes work for business', the organisation found that businesses view well designed environmental taxes favourably.
CBI chief economic adviser, Ian McCafferty, said as the number of environmental taxes rise, it is important for the industry to understand the successes and failures of taxation which is a major revenue raiser for the government.
Environmental taxation has raised £43.4bn in 2010/11, which is 8% of the UK's total tax revenue.
"Well-designed, environmental taxes can be a useful tool to help firms improve their environmental performance and unlock significant business investment," said McCafferty.
"However, poorly planned environmental taxes have damaged businesses and made the UK tax system less attractive to would-be investors."
In a separate response to the Department of Energy and Climate Change's (DECC) Consultation on a Simplified CRC Energy Efficiency Scheme, the industry body has urged the scrapping of carbon reduction commitment (CRC) and to implement mandatory carbon reporting.
CBI director for business environment policy, Rhian Kelly, said CRC does nothing to strengthen the business case to invest in energy efficiency.
"We urge the Government to recognise that this policy is past the point of no return - it should be scrapped, and its reporting elements replaced with mandatory carbon reporting," said Kelly.