France, Germany to call for EU border tax on CO2

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French President Nicolas Sarkozy said the two countries will table a proposal “in the coming days” to correct possible trade and competitiveness distortions created by a future international climate change agreement in Copenhagen later this year.

“We will ask – France and Germany – for a mechanism to be created at the borders of Europe in the event that there are imbalances” in the Copenhagen agreement, Sarkozy told a press conference after a summit of European leaders in Brussels yesterday (17 September).

The proposals, he said, will come out “in the coming days”.

According to the French president, the idea of a carbon adjustment tax is making inroads among European leaders as international negotiations at UN level fail to pick up pace.

“In the beginning, France was very isolated [on the issue],” Sarkozy explained. Commission President José Manuel Barroso last week said any discussion on external adjustment measures were “premature” as the EU’s priority was to strike a global deal in Copenhagen (EURACTIV 14/09/09).

But Sarkozy said the idea was now “progressing” among EU leaders “because it is more and more understood, not as a protectionist measure,” but as a way to “rebalance the conditions of free-trade and competition”.

“Otherwise, it is a massive aid to relocations. We cannot tax European companies and exempt others,” Sarkozy insisted.

The final statement of the EU summit yesterday put the pressure on emerging economies to raise their financial contributions to fighting climate change in the developing world. “All countries, except the least developed, should contribute,” the statement said, “with finance allocated according to need so that developing countries receive more than they are contributing”.

The European Commission estimates that total funding to help developing nations switch to low-carbon energies and adapt to the expected increases in floods and storms due to global warming “could amount to about EUR 100 billion annually by 2020” (EURACTIV 11/09/09). 

But EU leaders yesterday insisted that this estimate “presupposes appropriate mitigation actions by developing countries, especially those that are economically more advanced,” in a reference to China in particular, as Beijing holds vast reserves of foreign currency.

Public funding, EU leaders added, should reflect a country’s “ability to pay and responsibility for emissions” of greenhouse gases into the atmosphere. This statement should be seen as another reference to China, which overtook the United States in 2006 as the world’s leading emitter of carbon dioxide.

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