Earth Equity News

Carbon Tax Gaining Currency in Europe. By James Kanter and Matthew Saltmarsh, NYTimes, September 10, 2009. "Economists have long seen a carbon tax as a good idea because of its simplicity: Polluters pay at a level that is set by decree. But the idea never caught on widely in the United States or Europe, where governments jealously guard their autonomy on taxes. Industries lobbied for a market-based system called cap and trade instead, which they helped to design and from which some have profited handsomely. Now, with only modest progress so far in meeting goals set for greenhouse gas reduction, the carbon tax may be making a comeback. The French president, Nicolas Sarkozy, on Thursday unveiled details of a carbon tax... initially set at 17 euros, or $24.70, per ton of carbon dioxide emissions... The plan, widely previewed in recent weeks by French ministers, still must be debated by lawmakers. But it has already ignited a political storm...

"Trailblazers in Scandinavia say their taxes have been effective in lowering emissions. Sweden has had such a tax in place since 1991, when the government imposed a tax equivalent to €28, or $41, for each ton of CO2 emitted. The Swedes currently levy a tax of €128 for each ton of CO2, although industries that are exposed to international competition are permitted to pay the tax at a lower rate. Emissions in Sweden would be 20% higher without the tax, yet the economy has still grown by 44% since it was put in place, said Susanne Akerfeldt, a senior adviser on tax issues at the Ministry of Finance in Stockholm... Some experts said they believed other E.U. states were likely to follow France in implementing carbon taxes now because of the need to address deep budget deficits resulting from the economic downturn and stimulus spending. Such taxes may be less likely to increase unemployment or damage output than other means of raising revenue... The French tax, however, is supposed to be revenue-neutral -- meaning that other taxes are supposed to be lowered... Sweden has been using its current presidency of the E.U. to campaign for expanding the policy across the trade bloc. Yet Carl Bildt, the foreign minister of Sweden which holds the rotating presidency of the EU, acknowledged in an interview this week that there still were serious challenges."