Support growing for carbon tariffs after Copenhagen outcome
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Monday, 11 January 2010 13:30
A move being led by French President Nicolas Sarkozy to impose EU wide carbon tariffs on all imports from China and other nations is gathering momentum, as the EU looks to protect industry within its borders from those with less stringent environmental rules. Following the failure of the Copenhagen conference to set any concrete targets, the EU is once again concerned about the threat of carbon leakage and has now tasked the European Commission to present an analysis to the upcoming environment Council during their meeting on 15-17 January.
The initiative is a pet project of Mr Sarkozy’s and has so far garnered little support from other Member States, although German Chancellor Angela Merkel has been one notable exception. Speaking at a speech to businessmen on 6 December he had said “We will not accept goods that fail to conform to our environmental standards”, and “In future we will levy a climate tax at Europe's borders”.
As well as other Members, the initiative has not generated much enthusiasm at the Commission yet either, with the body taking the view that it could be too early to start talking in these terms, fearing it may jeopardise and potential agreement.
However as Simon Tilford, the chief economist at the Centre for European Reform (CER) points out, “Given that […] there will be pressure from lots of European governments in light of Copenhagen for more drastic, draconian steps like border tax adjustments, I think the Commission will have little option but to revisit the leakage angle in order to provide some reassurance to those governments that will push for much tougher steps”.
Although Mr Tilford himself believes that border taxes are not the best way forward, various other prefer to focus on the merits of such a step. Daniel Gros, the director of the Centre for European Policy Studies (CEPS), has argued that such a move could in fact increase global welfare as tariffs are imposed on exports of developing countries.
A further focus for the EU in the coming weeks is its mid-term emission reduction target, with all participants of the recent Copenhagen conference set to announce these targets to the UN by 31 January. The EU has to decide if it will stick to its current pledge of a 20% reduction, or if it will increase this amount to 30% as it had promised to do in the event that comparable commitments were made by other countries. So far it is unclear which target will be put forward as the UK and Scandinavian countries support the more ambitious target, whilst Eastern European Member States and countries including Germany and France have so far expressed reservations.
The initiative is a pet project of Mr Sarkozy’s and has so far garnered little support from other Member States, although German Chancellor Angela Merkel has been one notable exception. Speaking at a speech to businessmen on 6 December he had said “We will not accept goods that fail to conform to our environmental standards”, and “In future we will levy a climate tax at Europe's borders”.
As well as other Members, the initiative has not generated much enthusiasm at the Commission yet either, with the body taking the view that it could be too early to start talking in these terms, fearing it may jeopardise and potential agreement.
However as Simon Tilford, the chief economist at the Centre for European Reform (CER) points out, “Given that […] there will be pressure from lots of European governments in light of Copenhagen for more drastic, draconian steps like border tax adjustments, I think the Commission will have little option but to revisit the leakage angle in order to provide some reassurance to those governments that will push for much tougher steps”.
Although Mr Tilford himself believes that border taxes are not the best way forward, various other prefer to focus on the merits of such a step. Daniel Gros, the director of the Centre for European Policy Studies (CEPS), has argued that such a move could in fact increase global welfare as tariffs are imposed on exports of developing countries.
A further focus for the EU in the coming weeks is its mid-term emission reduction target, with all participants of the recent Copenhagen conference set to announce these targets to the UN by 31 January. The EU has to decide if it will stick to its current pledge of a 20% reduction, or if it will increase this amount to 30% as it had promised to do in the event that comparable commitments were made by other countries. So far it is unclear which target will be put forward as the UK and Scandinavian countries support the more ambitious target, whilst Eastern European Member States and countries including Germany and France have so far expressed reservations.
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