Brussels, 10/01/2008 (Agence Europe) - The European Commission has decided not to suggest a carbon tax mechanism within the framework of the package of legislative proposals on “energy and climate”, to be unveiled on 23 January. The mechanism would have been aimed at combating unfair imports of industrial products from countries that have not signed up to the Kyoto Protocol. “There will be no detailed carbon tax proposal on imported products”, Barbara Helfferich, spokeswoman for Environment Commissioner Stavros Dimas, confirmed on Thursday 10 January. The idea of a carbon tax gave rise to bitter discussion within the Commission which is fine-tuning its legislative proposals on implementing Community objectives to combat global warming, adopted by the European Council in March 2007 (20% reduction in CO2 emissions and greater contribution of renewables in the energy mix by up to 20%, by 2020). The Commission is seriously considering the idea of imposing a “climate tax” or carbon tax on companies of third countries that are not making much of an effort to reduce their greenhouse gas emissions. A provisional document, whose main elements were diffused by Reuters on 4 January, stipulated that companies of the most polluting countries should buy European CO2 trade permits (as is already the case for third country companies established in Europe) when exporting their goods to the EU.
The former French president, Jacques Chirac, was the first to launch the idea of a carbon tax, an idea that was then taken up by his successor, Nicolas Sarkozy. Speaking of China, India and the United States, three countries that refuse to fix binding targets when it comes to reducing greenhouse gas emissions, the current French president had suggested last November that companies in countries that are not making much of an effort to combat climate change should buy CO2 quotas or pay a tax allowing their products to enter Europe. Within the Commission, however, the idea of a carbon tax has never been met with unanimous approval. Its fiercest opponent is none other than Peter Mandelson, who has warned on several occasions that the imposition of a carbon tax could, in addition to the risk of being incompatible with WTO rules, lead to trade disputes. The trade commissioner urges, on the other hand, for a zero customs tariff for “green” goods and services (EUROPE 9330). After intense discussion, his colleague for the environment settled the matter. Stavros Dimas prefers, for now, to work towards the conclusion of international agreements on climate change, his spokesman told EUROPE; The Commission's legislative proposals will nonetheless leave the possibility open for measures to be taken in order to ensure fair competition for European industry if international agreements are not implemented, said Ms Helfferich. In answer to questions put to him by EUROPE, Peter Power, Mr Mandelson's spokesman, refuted the idea that a carbon tax is now definitely out of the question. If the Commission does not make a proposal on a carbon tax in its January package, it may contemplate bringing the matter up for review in 2011 or 2013. (E.H.)