Brussels, 28/03/2007 (Agence Europe) - In a bid to use the impetus created by the Spring European Summit (see EUROPE 9383), the Commission adopted a green paper on Wednesday 28 March on market-based instruments - indirect taxation, targeted aid and emissions trading rights - used for the purposes of environmental and energy policy. This green paper launches a debate, open until the end of July, on the use of these instruments to fulfil sustainable development aims set by the Heads of State and Government at European and national level. Against this backdrop, a revision of directive 2003/96/EC on energy taxation could be envisaged. László Kovács, the Commissioner responsible for taxation, recalled “the broad consensus” which emerged from the Taxation Forum in Brussels in favour of “the considerable impact” of market-based instruments on “the behaviour of actors and consumers” (see EUROPE 9390). He cited the possibility of shifting the tax burden further from labour to consumption. His environmental counterpart Stavros Dimas welcomed the start of a “debate” which will enable the Member States to “learn lessons” from the policies of others, particularly in the areas of “water-pricing, viable waste management and reducing local pollution”.
The Commission recognises the prime responsibility of the “Member States to find the right balance between incentive measures and dissuasive measures in their tax systems”. It nonetheless wishes to gather opinions from interested parties on the possible creation of a “generalist forum” on environmental fiscal reform. It also indicated its intention to work with the Member States with a view to “reforming subsidies which are damaging to the environment” at European and national level, as the European Council of June 2006 asked it to present a sector-by-sector “roadmap by 2008”.
The Commission envisages a modification of directive 2003/96/EC on energy taxation in order that it might contribute more to increasing efficient energy consumption and mobilise resources for the use of cleaner energies and technological innovation. It would be “appropriate to establish a clearer link between energy taxation and the general aims” of sustainable development in this piece of legislation. One solution could be to separate the minimum levels of taxation into energy and environmental components. These would be reflected at national level in the form of an energy tax and an environmental tax on emissions. For example, the taxation of fuels could be levied “as a function of their energy volume” and distinguish between the type of environmental waste. Increased differentiation in the taxation of fuels depending on whether they are used for “heating” or as a fuel could also be justified, the Commission believes. Reflection is also possible on the possibility of new taxes on environmental aspects of "electricity production” and their impact on "electricity of nuclear origin”. Out of concern for consistency, the Commission mentions the possibility of excluding sectors based on the Community emissions trading scheme (EU ETS) from the environmental aspect of directive 2003/96/EC.
The green paper mentions several instruments - both existing and future - used in environmental policy: the draft directive introducing an element linked to CO2 emissions in car taxation (see EUROPE 8984), the proposal to include aviation in the EU ETS (see EUROPE 9332) and the proposal to reduce particulate emissions by the end of 2008. The Commission cited local systems implemented in London and Stockholm, and is to ask actors about the application of infrastructure tariffs to different modes of transport and about the best instrument to reduce pollution emissions in maritime transport.
The green paper points out that the directive 2000/60/EC on water demands that the Member States put in place water pricing policies by 2010 which will encourage more efficient use of that resource. On the subject of waste management, the Commission wants to discover the opinion of interested parties concerning the possible introduction of a “harmonised tax on landfills with minimum rates applicable across the EU”. It also believes that measures which are differentiated in terms of the environmental effects of packaging materials or products such as batteries will incite a more sustainable type of consumption. Denmark and Latvia have already introduced taxes on packaging which depend on the environmental impact of each material? The Commission is also pondering the increased use of market-based instruments for the conservation of natural habitats and the protection of particular species. In order to improve air quality, it is also asking about the use of “cross-border emissions trading schemes between groups of Member States” in the framework of the revision of directives 2001/81/EC setting national emissions ceilings for certain atmospheric pollutants (SO2, NOx) and 96/61/EC on the prevention and reduction of pollution. (mb)