Carbon pricing is one of the most effective ways to reduce carbon dioxide emissions through financial incentives to help individuals and companies become more climate smart in an equivalent way. In the EU, carbon pricing is broadly used in two forms: national carbon taxes and the EU's emissions trading scheme. Carbon taxes reduces emissions through higher prices and emission allowances (ETS) favor the investment of energy-efficient technology by giving emissions a cost. National carbon taxes are applied e.g. in France, the United Kingdom and the Scandinavian countries.
As part of the European Commission's climate initiative "The Green Deal", it is proposed that ETS should cover more sectors, such as aviation. At member state level, several governments are considering introducing their own carbon tax (the latest example being Germany). The Green Deal also proposes that imported goods from countries outside the EU (for example China) should be subject to the same fees as if the goods were produced within the EU.
Although carbon dioxide pricing contributes to reducing greenhouse gas emissions, it is also a sensitive measure that can have detrimental effects on consumers and lead to counter-reactions as the French "yellow west" movement has shown. Designed incorrectly, a higher carbon dioxide price could increase inequalities, while the systems risk not contributing enough to reduce greenhouse gas emissions. All around the EU there are discussions on how this can be done - by issuing checks to every household, through compensation to households living in rural areas or some form of tax reduction.
The use of fiscal and financial instruments to reduce climate emissions are high on the agenda within the European consumer organisation BEUC, with some 40 members across Europe. The consumer movement has an important and unique role in the necessary transition to a sustainable and climate-neutral society that is easy to understand, reasonable, accepted and as fair as possible for consumers ("a just transition" in EU jargon).
- The main part of the carbon tax revenue should be used to benefit consumers. This is necessary for the broad acceptance of climate policy and is also an opportunity to compensate economically disadvantaged as well as those who choose climate smart lifestyles. The compensation should have a clear focus on equitable distribution, and it should also have a focus that benefits the entire society, both rural and urban. By fair distribution, we mean that vulnerable consumer groups should have the same opportunities as others to adopt sustainable lifestyles.
- In addition, under clearly defined circumstances, tax revenues can finance sustainable public investments - public transport, energy saving investments and renewable energy infrastructure.
- Distributing the cost fairly also means that subsidies for fossil fuels must be phased out gradually as they conflict with the goal of efficient carbon pricing and tax exemptions for aerial kerosene should be gradually reduced.
- Carbon dioxide prices are only part of the climate measures and should not replace other initiatives. Carbon dioxide pricing alone will not be enough to meet the climate goals. A strong sectoral policy (for consumer products, mobility, energy, financial services, etc.) with governing legislation is needed, especially to provide consumers with sustainable alternatives.
- Uniform carbon pricing at EU level should be accompanied by a carbon dioxide border tax / duty so that imported goods from countries with less stringent climate policy do not have a competitive advantage over those produced in the EU.
04 juni, 2020