EC fails to agree on an energy tax

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(First Edition)

THE DANES warned last night that the failure of European Community states to decide on the need for an EC energy tax risked adding to the 'no' vote in Denmark's coming referendum.

But the threat was not enough to persuade the EC to agree on the principle that the only way to curb carbon dioxide emissions to agreed levels was by introducing a tax on such emissions. Member states remained deadlocked over the vexed issue of how to make good a general pledge agreed in 1990 to stabilise CO2 emissions across Europe at 1990 levels by the year 2000.

Uninspired by the example of President Bill Clinton, who celebrated Earth Day earlier this week by agreeing to sign the biodiversity treaty negotiated at the Rio Earth Summit last June, and announcing a commitment to reducing CO2 levels, a significant blocking minority of Community states still cannot support the idea of an EC tax on CO2 emissions. Denmark, along with Belgium, Germany, Luxembourg, the Netherlands and Italy, supports an EC-wide levy.

The ministers were yesterday only trying to decide whether or not the need for an energy tax should be made part of the Community's environment policy; any decisions as to how to levy such a tax and at what rate would have to be discussed - and not necessarily approved - by finance ministers.

Britain remained adamantly opposed to an EC-wide tax, on the grounds that it was the business of individual governments and that such a measure would sit uneasily with recent legislation designed to help the EC's poorer members to increase their industrial productivity.

Spain, leading Portugal, Greece and Ireland, has complained that it is unfair to expect these 'developing' countries to bear the full brunt of a CO2 tax. Madrid refused to support it unless some sort of burden-sharing agreement could be worked out and Spain itself was able to organise an exemption.