EU mulls carbon tax to fight climate change

GOTHENBURG, Sweden, Oct. 2 (Xinhua) -- European Union (EU) finance ministers on Friday discussed the idea of introducing a carbon tax across the 27-nation bloc as a way to help fight climate change.

"Today, there were few reactions, but all the reactions were positive," Laszlo Kovacs, EU Commissioner for Taxation and Customs Union, told reporters after presenting the idea to EU finance ministers at an informal meeting in the Swedish port city of Gothenburg.

Swedish Finance Minister Anders Borg, whose country holds the EU rotating presidency, said there had been a constructive exchange of views and that the European Commission was encouraged to make a formal proposal, possibly next year.

He said a number of ministers welcomed the idea of introducing a carbon tax to reduce greenhouse gas emissions from sectors outside the EU Emission Trading Scheme.

The EU currently runs the world's largest Emission Trading Scheme, which imposes emission caps on certain EU industries, including power generators and some heavy industrial plants, and requires them to buy extra permit if they want to emit more.

The new carbon tax is likely to be applied to transport, agriculture, forestry, households and others.

In fact, several EU member states have already introduced such tax on national basis.

Borg said Sweden's carbon tax had proved "very successful" since it was introduced at the start of the 1990s.

Denmark, Finland and Slovenia also have taxes on household carbon emissions resulting from heating and electricity use. France is planning to introduce a carbon tax on gasoline or diesel fuel for cars next year, hoping it can bring more revenue for the government.

But Kovacs admitted it would not be easy to reach a deal since taxation is reserved for national sovereignty under EU rules and any change requires unanimity among 27 member states.

"Introducing a new tax in the EU has never been easy, and particularly it is not easy in the time of a financial and economic crisis," he said.

"But it is evident that the climate change is an even more disastrous global challenge than the current financial and economic crisis. It's a question of life or death for the population of the globe," he added.

Kovacs said the tax would not only help reduce greenhouse gas emissions in the EU, but also its revenues could be used in financing the fight against climate change in the developing world.

The revenues "should be used for climate change purposes (and) to finance the climate change efforts of the developing countries, because they need some support and we need revenues to support them," he said.

EU finance ministers also had an "active and constructive" discussion on the issue of climate financing today, according to the Swedish EU presidency.

World governments are expected to reach a new deal on the reduction of greenhouse gas emissions to replace the Kyoto Protocol after it expires in 2012 at a United Nations conference on climate change in Copenhagen this December, but current negotiations have been deadlocked, with climate financing proving to be a stumbling block.

Developing countries have called for generous financial support from rich countries to help them cut greenhouse gas emissions and mitigate the impact of global warming, for which industrialized nations are historically responsible.

In early September, the European Commission unveiled a blueprint for scaling up international finance to help poor nations, proposing that the EU would contribute some 2 to 15 billion euros (2.9 to 22 billion U.S. dollars) a year by 2020, a sum criticized by developing countries as not enough.