Germany Slams Carbon Tax As “Eco-Imperialism”

Jul 26, 2009 12 Comments ›› Erik Wong

ARE, Sweden (Reuters) – Germany called a French idea to slap “carbon tariffs” on products from countries that are not trying to cut greenhouse gases a form of “eco-imperialism” and a direct violation of WTO rules.

The issue of greenhouse tariffs has met bitter opposition from developing countries such as China and India, who count on the developed world to buy their exports as they build their economies in the face of the worst financial crisis in decades.

Matthias Machnig, Germany’s State Secretary for the Environment, told a news briefing on Friday that a French push for Europe to impose carbon tariffs on imports from countries that flout rules on carbon emissions would send the wrong signal to the international community.

“There are two problems — the WTO (World Trade Organization), and the signal would be that this is a new form of eco-imperialism,” Machnig said.

“We are closing our markets for their products, and I don’t think this is a very helpful signal for the international negotiations.”

European environment and energy ministers are meeting in Sweden to try to come up with a single vision of how the 27-member bloc will fight global warming, ahead of a major environment summit in Copenhagen.

The first phase of the 1997 Kyoto Protocol on cutting greenhouse gas emissions is set to expire in 2012. Final negotiations on a successor climate change pact will take place in the Danish capital at the end of the year.

U.S. LEGISLATION

The U.S. House of Representatives has already passed legislation that contains carbon tariffs. It would allow the United States to impose duties on imports of carbon-intensive goods such as steel, cement, paper and glass from countries that have not taken steps to reduce their own emissions.

Some say such tariffs could be a backup plan for Europe, should United Nations members fail to reach a deal in Copenhagen.

But Swedish Environment Minister Andreas Carlgren, whose country holds the rotating European Union presidency, said member states currently had no “plan B” beyond landing a deal in Copenhagen. He said there was as yet no official proposal on the table from the French regarding carbon tariffs. “We are absolutely against each try to make use of green protectionism,” Carlgren told Reuters. “There should be no threat of borders, of walls or barriers for imports from developing countries.”

French President Nicolas Sarkozy’s office said last month such taxes could help create a “level playing field” for European companies competing with international firms from countries that have not put a price on carbon emissions.

EU Energy Commissioner Andris Piebalgs has said member states should keep the French proposal in mind, but also worries how such tariffs could be viewed by other countries.

China said earlier this month carbon tariffs would violate the rules of the WTO and the spirit of the Kyoto Protocol.

Such tariffs would represent a radical shift for the WTO, whose goal is reducing barriers to trade. However, the WTO says it is possible to impose import tariffs if such taxes are also imposed on a country’s own industry to ensure a level playing field.

However, Europe could see some progress on domestic carbon taxes on a national level within the 27-member bloc. Sweden’s finance minister, Anders Borg, plans to raise the issue at the next finance ministers’ meeting, Industry Minister Maud Olofsson told a press briefing.