Meeting in Sweden on 1-2 October, the Commission floated the idea of imposing a carbon tax on sectors outside the EU's emissions trading scheme (EU ETS; see EurActiv LinksDossier) for the first time at ministerial level.
"There were not many reactions but those reactions were all positive," said Taxation Commissioner László Kovács, speaking to journalists after the meeting. He indicated that the Commission had been encouraged to propose the legislation next year at the earliest.
"The introduction of a new tax in the European Union has never been easy and particularly it's not easy in the time of a financial and economic crisis," Kovács said. "But it is evident that climate change is an even more disastrous global challenge than the current financial and economic crisis."
The EU ETS only covers around 45% of the EU's greenhouse gas emissions, leaving out major emitting sectors, notably agriculture and transport. The Commission has been drafting a proposal to review the current Energy Taxation Directive in order to address these and small industrial installations excluded from carbon trading (EurActiv 29/09/09).
As taxation is the sole competency of the member states, any EU proposal will require unanimity in the 27-state Council of the European Union. The taxation commissioner stressed that the EU executive is under no illusions that it will be possible to get a deal before the UN climate conference in Copenhagen, where an agreement on a new international climate treaty is due to be reached.
Nevertheless, the EU hopes to use the possible adoption of the new market instrument to leverage greater commitments from other countries in the negotiations, which have stalled on funding in particular.
"The revenue could be used both to compensate lower-income households and also to build trust between developed and developing countries, simply putting money on the Copenhagen table," Kovács said.
Pressure on the US
The ministers also stepped up pressure on the US to bring more to the negotiating table.
Anders Borg, finance minister of Sweden, which currently holds the EU presidency, stated that while the new US administration is making the right kind of noise, it has yet to put its full weight behind securing an ambitious agreement in December.
"We have some countries that are very, very sceptical, and if we're going to make progress, it can't only be Europe that takes leadership. We must also see US leadership, and we will do our utmost to convince the US on this issue," he said.
Developing countries have repeatedly pointed out that the historical responsibility for emissions lies in the industrialised world. They want to see the EU and US devote around 1% of their GDP to helping them cope with climate change.
The EU is so far the only region to have produced tentative figures for how much funding would have to flow from industrialised nations to developing countries to finance efforts to cut emissions and adapt to inevitable consequences of global warming. Last month, the Commission presented its blueprint for climate aid, suggesting that the EU earmark €2-15 billion per year per year by 2020 to poor countries.
EU leaders hope to finalise the bloc's position at their meeting in Brussels on 30 October. Preparation for the summit will take place during meetings of finance and environment ministers the previous week.
'Convergence' on burden-sharing?
The EU's position on financing is steadily coming together, the Swedish finance minister stated after last week's meeting. Previously, EU debates have stalled on disputes over how the burden should be shared between member states, with Eastern European countries in particular concerned that their contribution will become too high.
But the Swedish finance minister spoke of "a very strong convergence" on burden-sharing that emerged at the discussions in Sweden. He argued that "very few” were now arguing against the Commission's assessment of how this could be done.
At the same time, however, Polish Finance Minister Jan Rostowski was reported as saying that his country would not agree to a mechanism that could lead to an unjust proposal for the parties in the international agreement.
"From our point of view it's totally unacceptable that the poor countries of Europe should help the rich countries of Europe to help the poor countries in the rest of the world," Rostowski said.
