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FROM VOLUME 4, NUMBER 10, OCTOBER 1991

NEWS...
EC CARBON TAX

Item #d91oct65

After several months of struggling over how to implement its pledge to stabilize CO₂ emissions by the year 2000, the European Community issued a draft plan on September 25, 1991, for discussion by its member nations. The draft abandons individual national targets for emission reductions, but proposes a highly controversial tax to be based partly on carbon emissions and partly on energy use, in a manner yet to be settled. The tax is intended to be "revenue neutral," with compensation by tax incentives and reductions in other taxes on businesses and individuals. By the year 2000, one version of the tax is expected to raise the price of coal by 61 percent, of oil by 21 percent and of gas by 31 percent. To reduce the impact on competitiveness, the current proposal excludes energy-intensive industries involved in extensive international trade.

For discussion of the tax proposal and reactions to it see Global Environ. Change Rep., pp. 1-3, Oct. 4, 1991; see also New Scientist, p. 13, Oct. 5, p. 11, Sep. 28 (editorial), and p. 15, Sep. 21. A report issued by the Swedish Environmental Council, Economic Instruments for Reducing Western European Carbon Dioxide Emissions, is discussed in Intl. Environ. Rptr., pp. 435-436, Aug. 14.