The first time I stumbled across the term hypothecated taxation was in an article late last year about an interview the pop group Girls Aloud had given with the New Statesman.

Now there's a sentence you don't get to write too often.

In the interview the UK's finest purveyors of innovative power pop and lad mag photo shoots revealed that they are broadly in favour of higher taxes, but only if you get an indication where the money is being spent.

As band member Kimberly Walsh observed in a comment that revealed the group to be a bit more politically astute than you'd expect given the majority of their public pronouncements are reserved for the slagging off of Charlotte Church: "You'd happily pay taxes if you thought, I'm paying them so a fireman or a nurse can have a decent wage. People just want to know it's going to the right people."

I only mention this little vignette, because up to that point I had never before stumbled across the term hypothecated taxation and a quick straw poll of the office revealed that I was not alone.

Since then however the concept, if not the term itself, has emerged as one of the defining debates for the whole environmental movement as report after report has suggested that such a taxation model represents the best means of garnering public and business support for taxes on carbon emissions and waste.

Just yesterday we saw two further studies suggesting the appetite for green taxes where the revenue is immediately diverted into environmental projects is substantial.

According to a major BBC survey of 22,000 people worldwide half of respondents are in favour of increased green taxes on fossil fuels, but that figure soars when asked if they would support green taxes where the revenue raised was used for green purposes.

Similarly, a new survey from accountants Hacker Young found a whopping 90 per cent of businesses felt cash raised from green fences should be ringfenced for environmental purposes.

It is easy to understand this widespread support for hypothecated taxation. As Doug Miller of research firm GlobeScan, which carried out the BBC poll, observed most people instinctively dislike taxes because they feel tax revenue is not spent in the right areas. Give them an insight that green tax revenue is being spent directly on tackling the environmental issues that they are increasingly concerned about then they are far more likely to support the taxes in the first place. He pointed to China as a prime example where support for green taxes is far higher than in other countries, because people are "literally dying" because of high levels of pollution and they see how green taxes can work.

It seems that at best people will be happy to pay hypothecated green taxes, telling themselves they are contributing to the fight against climate change, while at worst they will see them as a necessary and understandable evil.

For businesses the appeal of such ring fencing is even more pronounced. They understand that green taxes will likely lead to increased costs and that passing these costs onto customers will be far easier if they can point to widely supported green taxes as the cause. They also know that government is currently not investing nearly enough in the large public works and mitigation measures required to limit and adapt to climate change and that ring fencing a major revenue stream to spend in this area will finally force them to throw serious cash at the defining problem of the age.

So given all this support why is the government so reluctant to even consider the idea? Gordon Brown could urgently do with a populist tax idea – or at least one he didn't have to nick from the Tories - and yet when I last asked the Treasury about their position on hypothecated green taxes I was told in no uncertain terms that it was simply not on the agenda.

The problem is that hypothecated taxation is anathema to many at the Treasury. They fear, with some justification, that to introduce just one hypothecated tax would prove the thin end of the wedge and once tax payers were empowered in such a way they would demand that more and more of their taxes were assigned to certain sectors and causes before they are even paid.

Such a scenario, while looking appealing and democratic at first glance, would prove an unmitigated disaster.

Dostoevsky once said that "the degree of civilization in a society can be judged by entering its prisons", but can you imagine how loudly some people (and newspaper proprietors) would vehemently object to seeing a hypothecated tax diverted into improving our prisons.

Many people, like the aforementioned Walsh, would love to see how much of their taxes went to nurses and firemen, but how many would want to know the amount being spent on traffic wardens and health and safety inspectors?

Widespread hypothecation would be a recipe for regular and vigorous protests and anti-tax camapaigns and as such it is easy to see why the Treasury would is so twitchy about the concept.

Moreover, the model also denies government the flexibility it requires to respond to unexpected crises. Passing a law demanding that all revenue from fuel duty goes into improving public transport and flood defences for example would be widely welcomed by environmentalists and businesses, but you know mandarins at the Treasury would be thinking "what happens when there's a recession and we need that money to invest elsewhere".

And yet, while this reasoning explains why the government dismisses the idea of hypothecated green taxes it is hard to imagine it can continue to ignore a concept that has such widespread support.

There are hypothecated taxes that work - the TV licence is probably the best example – and the fact remains that the government will have to invest vastly more in the next couple of decades to drive the transition to the low carbon economy and adapt the UK's infrastructure to the risks posed by climate change.

To do this tax revenues will have to increase. The idea, as the Tories claim, that green taxes can be made revenue neutral by cutting other taxes sadly won't wash – driving efficiencies in other areas of government simply won't free up enough funds to divert into essential environmental projects and overall government spending will have to increase if we want the public transport and flood proof rivers that will be increasingly essential to UK business and growth.

As Gordon Brown learnt during the fuel protests increasing taxes on fossil fuels is a dangerous game to play.  But the only way to do it is to convince people that such taxes are not a revenue grab but an essential means of discouraging polluting activities and raising revenue for essential climate change projects.

Hypothecated green taxes are the only option and if it means less flexibility for the Treasury and more pressure on politicians to reveal how our taxes are spent then that is a price they will have to pay.

In short, if it's good enough for Girls Aloud, it should be good enough for Gordon Brown.