EU seeks to fight climate change with taxes

Tax Commissioner László Kovács said that taxes had the capacity to steer the bloc's 500 million consumers toward a more efficient use of resources, while at the same time recycling the revenues back into the economy. 

He added that there is a real scope for action in this field: "The tax that the public is most inclined to pay is environmental taxes, because they do understand that what is at stake is the future of mankind…Even governments are inclined to give preference to taxing pollution and consumption because to lower the tax on labour would certainly result in a higher level of competitiveness." 

German Finance Minister Peer Steinbruck said: "The Commission needs to look at tax issues over the whole of the EU," adding that work on harmonising energy taxes across the EU should be accelerated. "We think it's possible to create jobs and protect the environment," he said. 

"The political stage and citizens…are more and more confronted to the consequences of the changing climate and of environmental pollution. So, I think the understanding and the willingness to pay for it increased. And in the meantime, a lot of our industries made the experience that to offer highly technology-oriented projects and procedures is a factor of higher competitiveness," he said. 

"Market-based instruments are the most direct and simplest way to make the polluter pay," Environment Commissioner Stavros Dimas said, adding "There is a logic for action at EU level." 

Jacqueline McGlade, executive director of the European Environment Agency (EEA)  said: "Ecological Tax Reform can help us to realign a European economy that is still characterised by an insufficient use of labour resources and an excessive use of natural resources." 

Business has cautioned that higher taxes could damage the European economy's ability to compete on the global market.