A penny on every shirt, skirt and stocking could fund better recycling and repairing in the fashion industry, according to a parliamentary report that recommends new taxes to end the throwaway consumer culture.

The cross-party environmental audit committee also proposes tax incentives for companies that offer repair services for clothes, and urges schools to introduce darning and mending classes.

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The report warns the fashion business in the UK creates 1m tonnes of waste each year and is a bigger source of carbon emissions than aviation and shipping combined.

It calls on the government to force all retailers with a turnover of more than £36m to take responsibility for the waste they create. A producer responsibility charge of one penny on each item of clothing should be levied to pay for better clothing collection and recycling, it said.

“Fashion shouldn’t cost the earth. Our insatiable appetite for clothes comes with a huge social and environmental price tag: carbon emissions, water use, chemical and plastic pollution are all destroying our environment,” said the Labour MP Mary Creagh, who chairs the group.

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The report is the culmination of an inquiry by MPs into the sustainability of the fashion industry. After gathering evidence from 16 retailers, they found their voluntary efforts to reduce their environmental footprint had been outweighed by a 200,000-tonne increase in sales since 2012. Creagh said people were buying and discarding clothes more quickly than ever.

“‘Fast fashion’ means we overconsume and underuse clothes. As a result, we get rid of over a million tonnes of clothes, with £140m worth going to landfill every year,” she said.

Britons buy more clothes per person than any other country in Europe, according to the report. On average, consumers in the UK buy 26.7kg of fashion items each year, compared with 16.7kg in Germany, 14.5kg in Italy and 12.6kg in Sweden.

The environmental and social implications are enormous. The report estimates textile production creates 1.2bn tonnes of CO 2 each year and 20% to 35% of all “primary source” microplastics: microbeads, fibres, pellets and capsules, in the ocean. A kilogram of cotton, equivalent to a shirt and jeans, needs between 10,000 to 20,000 litres of water to produce it and often involves dire labour conditions both in the UK and overseas.

Facebook Twitter Pinterest Burberry was among the fashion retailers praised for being more engaged on sustainability. Photograph: Henry Nicholls/Reuters

Several companies were cited for failing to prioritise sustainability, including Amazon UK, Boohoo, Missguided, JD Sports, Sports Direct and TK Maxx.

Others were praised for being more engaged on the issue, including Burberry, Marks and Spencer, Primark, Tesco and Asos, but MPs noted that overall the voluntary approach was not working and said it should be replaced with mandatory environmental targets for all big retailers.

As well as the proposed one penny charge, it said the government should reduce VAT on repair services, ban incineration or landfilling of unsold stock that can be reused or recycled, and draw up a “net zero” emissions blueprint.

It also recommends incentives for companies that reduce the material consumption needed for growth. This would require research into the environmental performance of different materials (for example, polyester shirts have more than double the carbon footprint of cotton shirts) and to measure microfibre pollution. Ministers, it says, should explore ways to foster a “sharing economy” with more hiring and swapping and less buying and discarding.