Taxation trends in the European Union

EUROSTAT – 28/06/2010

This publication by Eurostat compiles tax indicators in a harmonised framework based on the European System of Accounts, allowing accurate comparison of the tax systems and tax policies between EU member states. The report highlights that currently one euro out of every fourteen in revenue is raised from environmental taxes. As a percentage of GDP, environmental tax revenues have been slowly declining since 2004, particularly in the euro area. This trend continued in 2008 and has recently been applying also to the majority of new Member states. Read the main results…

‘EU plots debt-busting green tax plan’

BUSINESS GREEN – 01/06/2010

Draft documents seen by Reuters suggest that the European Commission may be due to propose significant changes to energy taxation policy, revolving around a single pan-European energy tax system. It is suggested that a minimum level of taxation would be imposed for energy sources ranging from coal to biofuels to renewables, the value of which would be based on the energy content and carbon footprint of the fuels. It is hoped such a measure would create new incentives for investment in low carbon energy sources. Also included in the draft documents are plans to ensure that carbon intensive industries are protected, and that support is provided to vulnerable households to minimise the risk of adverse distributional impacts. Read the article…

‘Europe warming to a carbon tax’

ENERGY TRIBUNE – 23/09/09

This article suggests that European governments are warming to the idea of a carbon tax, highlighting recent proposals by France and Ireland for introducing such a tax next year. The idea of EU-level carbon taxation is not new and was raised by the European Commission in the early 1990s, but rejected by member states which did not agree that tax policy should be controlled by Brussels. Instead they voted for the EU ETS. Individual European countries – including Sweden, Denmark and Norway – have already implemented carbon taxes, but France is the biggest country to embrace it to-date. Spain and Ireland were previously considered unlikely candidates due to their high unemployment rates, yet discussions are underway about potentially introducing similar levies next year. Paul Ekins suggests that countries might move on carbon taxes individually but are still unlikely to do so as a block. He highlights that ‘it’s not surprising that in the run up to Copenhagen governments are looking for ways to do some kind of positive contribution. It gives them a stronger bargaining position ahead of the summit’. Read the article…

Six million new jobs and we meet our carbon targets

Six million new jobs could be created across the EU – an increase in employment of 2.7 per cent – if a programme of green fiscal reform was introduced. A green tax shift would also enable the EU’s carbon dioxide reduction targets to be met.

This was the message from new research presented at a major international conference held in London on 15th and 16th July organised as part of the Anglo German Foundation’s PETRE project in conjunction with the Green Fiscal Commission.

Commenting on the research findings the conference chair, Professor Paul Ekins, said, “This research shows that a really strong programme of green fiscal reform across Europe will benefit the economy as well as reduce carbon dioxide emissions. It is not clear that Europe’s targets for reducing carbon dioxide emissions can be met without such a tax shift, but achieving them in a way that also increases employment makes the arguments for this policy absolutely compelling.”

 The conference also presented evidence to show how a green tax shift can increase innovation in key environmental industries, and give results for its impacts on countries outside Europe. The conference concluded with a discussion of  the political issues related to the implementation of the green tax shift with MPs from the major political parties.

Presentations from the conference will be made available shortly on the Green Fiscal Commission and PETRE project websites. The final report from the PETRE project with full details of the research will be launched in October.

‘Bonn: Tax on rich nations’ ships and planes could fund climate aid’

THE GUARDIAN – 08/06/09

This article highlights suggestions emerging from the latest round of UN climate talks in Bonn for Britain and other wealthy nations to accept a levy on international flight tickets to raise billions of dollars to help the world’s poorest nations to adapt to climate change under an international global warming deal. The aviation levy, expected to increase the price of long-haul fares by less than 1%, would raise $10billion a year. This could be matched by a compulsory surcharge on all international shipping fuel. The article also refers to a separate Mexican proposal to raise billions of dollars through a ‘green fund’ plan. This would oblige all nations to pay amounts according to a formula reflecting the size of their economy, greenhouse gas emissions and population. Read the article…

An subsequent article in the Guardian highlights opposition to this proposal from the International Air Transport Association, arguing that they ‘have seen so many taxes that we are fed up. We are serious about what we pay in emissions [taxes] going towards the environment in a serious way’. Read the article… 

‘European parliament to pass bill to cut bills’

THE GUARDIAN – 22/04/09

The European Parliament has approved legislation that will give greater protection to EU households suffering from soaring gas and electricity bills. The new law stipulates that governments will draw up national energy action plans to eradicate fuel poverty or, at least, offer greater protection to the most vulnerable energy consumers. A new pan-European consumer charter will enable customers to switch suppliers within a maximum three weeks, and will force the industry to put smart meters into 80% of homes by 2020 and all homes by 2022. Read the article…

‘Greenpeace says car scrap schemes waste taxes’

REUTERS – 09/04/09

Environmental group Greenpeace has criticised pledges by a number of countries to offer scrap incentives to encourage drivers to ditch old cars for more fuel-efficient models, arguing that ‘the schemes will not increase the competitiveness of the car sector, nor will they benefit the climate, the environment or road safety…the incentives will not resolve overcapacity in the auto industry’. Greenpeace has also suggested that car-makers are using such schemes to deplete stocks of lower-standard models, ahead of new pollution standards that will come into force in September. Read the article…

‘Scientists to adopt tough stance for Copenhagen talks’

EURACTIV – 09/03/09

Top international scientists have gathered in an emergency summit in Copenhagen to provide a comprehensive up-to-date picture of climate change research carried out in the past two years, since the Fourth IPCC report. This research highlights new findings on sea-level change and tipping points, and demonstrates that global warming is progressing faster than previously assumed and its impact could be much more devastating. The conclusions from this conference will be condensed into approximately five ‘rather poignant’ messages to the Copenhagen climate change conference (COP 15) taking place in December, in a deliberate attempt to warn policy-makers of the need for a much tougher international climate agreement. A major topic to be discussed is whether limiting global warming to 2˚C is still feasible (which a recent article in the Independent indicates may no longer be the case) Read the article…

‘Scientists plan emergency summit on climate change’

THE GUARDIAN – 09/02/09

Climate experts from across the globe are planning to convene in Copenhagen next month with the specific intent to influence policy; to warn the world’s politicians of the need to be much more forthcoming in their response to climate change. The meeting follows recent ‘disturbing’ studies indicating that carbon emissions are rising faster than expected and that the effects of global warming may be more significant and faster than previously expected. An update to the 2007 report of the IPCC will be published at the meeting, highlighting unexpected trends such as a decrease in the amount of carbon pollution being absorbed by the oceans, and an increase in Greenland ice melt. The meeting will address the question of whether it is still possible to limit global average temperature rise to 2˚C, which is defined as dangerous by the EU. Read the article…

‘EU executive plans lower sales tax on green goods’

REUTERS – 30/01/09

The European Union’s Tax Commission, Laszlo Kovacs, is expected to propose a reduction in the tax rate of a number ‘green’ products and services in April. Whilst the current tax rate is based on energy content, Kovacs will propose that this be split into two components – energy content and carbon dioxide emissions, so as to provide tax and price advantages to renewables. The proposal will also suggest a reduced rates on a limited number of energy efficient or environmentally friendly products such as insulation and some other building materials and household appliances. Read the article…