France and Italy call for climate ‘tax’
Sarkozy and Berlusconi ask Commission to get tough with countries that fail to take climate action.
Nicolas Sarkozy and Silvio Berlusconi have renewed calls for an EU border ‘tax’ on countries that fail to take sufficient action to tackle climate change.
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In a joint letter today (15 April) to European Commission President José Manuel Barroso, the French president and the Italian prime minister said that “a border-adjustment mechanism” is “an indispensable lever that the European Union must have the power to use if we want to preserve the environmental integrity of our efforts while ensuring the engagement of our principal partners”.
The letter comes as the Commission prepares to publish a report in June assessing what the state of international talks on climate change means for the EU’s climate and energy laws.
France and Italy are concerned that failure to secure a strong-enough climate treaty would leave Europe vulnerable to “carbon leakage”, the risk of industry leaving Europe for less-regulated climes, with no overall fall in carbon emissions. The two governments think that if non-EU countries do not act to reduce their emissions, the EU should be ready to impose measures on their importers.
“It would be unacceptable if the already ambitious efforts that we have agreed to in the European Union…were to be compromised by carbon leakage resulting from the absence or insufficiency of action of certain third countries,” states the letter, the result of a bilateral summit between the two leaders in Paris last week (9 April).
France and Italy would like importers from potential carbon-laggards to be included in the European Emissions Trading Scheme. According to their analysis, such a border-adjustment mechanism could be put in place without breaking World Trade Organization rules.
The leaders suggest that this measure would boost the EU’s hand in international negotiations. They call on the EU to “strengthen its tactical approach” with “new instruments of negotiation” to make it “more effective and more credible in the relevant international forums”.
Border-adjustment mechanisms could be interpreted as a change in tactics, following last year’s Copenhagen climate conference, where the EU was widely believed to have been sidelined.
But carbon leakage was an issue well before Copenhagen. France called for border-adjustment measures in 2008 when the EU debated its climate and energy package, which was finally agreed at the end of that year. This call was repeated in a joint letter from Sarkozy and German Chancellor Angela Merkel in September 2009.
Border-adjustment measures have traditionally been opposed by economically-liberal member states, most notably Sweden and the UK, as well as the Commission’s trade department.