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European carbon tax project is delayed

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#Climate Change #Compliance
Following the 27th European Commissioners’ reunion on June 23rd, the European carbon tax project has finally been delayed. Algirdas Semeta, Taxation and Customs Union Commissioner, suggested a tax of 20 Euros per ton of CO2 for housing, road transport and agricultural sectors, and was asked to study the economical impacts such a tax could have on European economies. As the study does not have deadline, the “Carbon Tax” project might be on the waiting list of European Commissioners’ agenda, who are not about to agree on this new fiscal measure.

Taxation is a sensitive subject in European negotiations because it requires propositions’ unanimity adoption among the 27 states of the Union. Controversial debates can last for months or even years between the different European Institutions or member states, as it may be the case for the carbon tax. Supported by Sweden, Finland and France, the project is viewed with a jaundiced eye by Ireland, United-Kingdom, Germany and Poland. Though, this tax could generate about 300 billion Euros per year of income for the European Union.

French President Nicolas Sarkozy, who previously approved a french carbon tax project censured by the French Constitutional Council, is in favor of this European proposition. In fact, French companies control more of their carbon emissions than the rest of the world: 59% of them control their energy emissions against 37% for other companies. They also are 30% to measure their carbon footprint againts 19% for the rest of the world (Regus study). So, the carbon tax could prevent environmental dumping from less-ecological countries like China, and therefore protect French and European companies from unfair competition. China, the first country to be aimed by this tax, is of course opposed to this “protectionnist measure”.

Michel Rocard, President of the Experts Commission for the French tax project {{LNK|gives his point of view|}} on an European tax instead of a carbon exchange market : “Such a tax could solve all the problems regarding taxation equity, guarantee a dissuasive effect and give foreseeable nature to economical operators”. His argumentation is countered by the President of the Medef Sustainable Development Commission, who worries about potential commercial hostilities with China or the United-States: “If ideationally the European carbon tax is a good idea, it is very complex to implement. Starting a commercial war could be risky because no one would shell”.

In addition, the British economics newspaper « The Economist » published an article about a Cambridge Econometrics study presenting the consequences of a carbon tax on Britain’s economy. The {{LNK|results|}} are more optimistic that one could think, and keep the door open to this European environmental tax.

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