Monday, 5 July 2010

EU Climate Change commissioner proposes a Carbon Tax

Commissioner Connie Hedegaard proposed a tax on what you burn and threw her weight behind an EU carbon tax. This approach is spelled out in the EU's Energy Taxation Directive. This approach will colour Europe's efforts to stay ahead of the game in international climate negotiations.

On 26 May 2010, Climate Action Commissioner Connie Hedegaard presented a communication analysing the options for increasing the EU's emissions reduction target from 20% from 1990 levels by 2020 to 30%. It concluded that the recession had brought down the cost of reducing emissions significantly, and meeting a 30% target would cost just €11bn more than the estimate for 20% envisaged two years ago (EurActiv 27/05/10).

Hedegaard was speaking in a session dedicated to climate change. Hedegaard thinks that energy taxation can provide a lot of positive results. The commissioner argued that a shift from taxing labour to taxing energy would encourage people to stay longer in the job market and find ways to finance Europe's "relatively expensive welfare societies". For instance, this tax could encourage the agriculture sector to explore possibilities like biogas.

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