By Sam Morgan | EURACTIV.com
Jan 28, 2020 (updated: 2:29)
The EU could deploy a carbon border tax against the UK after Brexit, according to the head of the European Parliament’s environment committee, if Westminster diverges from bloc rules on issues like carbon markets.
French MEP Pascal Canfin told reporters on Monday (27 January) that the EU “should be tough” and “shouldn’t be afraid of an economic no-deal in December”, as the next round of Brexit-based negotiations loom on the horizon.
The talks will determine what sort of relationship the UK and EU will have after the transition period ends on 31 December and Canfin made clear that divergence from bloc rules will make trade relations more difficult.
“Talks haven’t started on the right path, with the UK government saying it wants full [single market] access but also divergence. To me that is like the EU asking for full alignment but with quotas,” the lawmaker warned.
As head of the Parliament’s environment committee (ENVI), Canfin will help advise negotiators on related issues during the talks, citing carbon markets as a tangible example of where difficulties might arise.
The UK is currently a part of the EU’s emissions trading scheme (ETS) but the government plans to leave the carbon market and set up its own carbon-pricing equivalent. Canfin told reporters that “the markets have to have the same price”.
“For the EU’s industry, you can’t accept that the UK has full access” to the EU’s single market while a lower carbon price is on offer across the Channel, he insisted.
UK government documents from 2018 suggest that a British equivalent would add up to around €35 per tonne, while the EU ETS currently trades at roughly €25, although the price is expected to increase as new green policies are signed and delivered.
“We started designing the carbon border adjustment mechanism. We might imagine that we will apply this mechanism to the UK in order to restore the level playing field,” Canfin suggested, referring to a new tool aimed at preventing ‘climate dumping’.
The Renew Europe MEP also cited carbon markets when asked if the UK would only be expected to accept EU laws as they stand on the day a new trade deal is signed or if it would have to comply with updates and reviews, known as ‘dynamic alignment’.
Canfin replied that “for the EU team, it’s about no-regression clauses, so you can’t diverge regarding current EU law”, adding that updates to climate rules like the ETS will soon be on the cards with the new Green Deal agenda presented by the European Commission last month.
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So, how will the EU apply a “carbon tax” on Airbus aircraft parts, wing and engines, that are made in the UK but assembled in France (IIRC)? You can tell the EU masters haven’t thought it through properly.
The EU has lost a parcel of income with the loss of one of its biggest members. Clearly dividing that loss 27 ways may make it easier to bear, but its more than likely that they see themselves recouping some or most of the loss in other ways.
To wit, the UK will end up paying, either by some stipend to gain preferential access to the EU, or in tariffs on UK goods.
Those who fondly imagine that the UK wont be paying something really ought to go out and get their bumps felt 🙂
The UK has been paying in buckets since 1973 and more plus losing sovereign rights etc. There is a very famous Not The Nine’O Clock sketch from the 80’s about it.
As the UK currently has a trade deficit with the EU, the EU would only hurt themselves. Forcing the UK to find other markets to trade with will only diminish the EU. Do they think that the UK will simply roll over and pay the higher costs, or will they trade where the getting is good. Many of the things the EU is doing internally are violations of the WTO treaties. They overtly subsidize many markets (not even talking tax credits here) in violation with WTO trading rules. If they decide to “punish” the UK for leaving, they will only accelerate the fall of the EU economy. The UK currently has one of the best functioning financial markets in Europe and if the EU doesn’t want to cut their own throat, they will stop making idle threats. Then there is the whole issue of the UK closing its fishing grounds to foreign vessels – a huge howl will come from EU countries on that one. Pain won’t be one directional if the commissars of the EUSSR decides to punish its “wayward pet”.
Except, since the golden age of St Margaret of Grantham, much of UK business in now owned by foreign interests who will go where the getting is good. So expect a ‘Liberated’ EU to be offering sweeteners for relocation to parts east ?
As far as fishing goes, the UK fleet is so miniscule now that it could not capitalise on a sudden bonanza. Even as things stand, 98% of that which the UK fleet catch is sold to the EU. However if you’re right about the fishing, maybe whats on offer at ones local chippy will be more affordable, like it used to be back in the day 🙂
Hurting the economy is never a problem in Europe.
In order to please the US, the European agricultural exporting countries accepted to lose their markets in Russia. To punish Russia for a military act we don’t sell them fish and porc. That will teach them… to develop their own production.
Now Russia is STRONGER economically, French producer took most of the impact, the US did nothing except keep on buying rocket engines and rocket services to Russia and French politicians aren’t even mad at Obamrump.
French politicians are mad at the US almost only for silly reasons like the fact a French bank that acted illegally in the US, for years, then lied about it, pretended to stop and went on acting illegally, financing some of the worst regimes in Africa, ended with a fine. Because François Hollande considered finance “his enemy” – except when they finance dirty regimes I guess.
So in France:
– applying US laws in the US: not OK (some even called the US a rogue country for doing that)
– asking France to fund NATO and its own defense (last time we tried launching missiles from a ship in a real military operation, failure rate was 100%): not OK
– making France drop a major export market, badly harming farmers, for no rational reason: OK
The US and Europe have effectively done the biding of Putin with that operation.
“Many of the things the EU is doing internally are violations of the WTO treaties”
I don’t know much about WTO norms, but anyone with a passing interest in the workings of Europe knows that in term of “free and unbiased market” principle of European laws, the whole German electric market is absolutely, definitively, no debate possible, illegally rigged.
The Germans can absolutely force higher energy costs on them with silly norms, but then they can’t absolve some big consumers from these norms and costs; in other words, if the very small plants pay a high price for electricity, then big consumers must pay also. That is transparent, obvious, in your face illegal state aid.
Germany has been violating the most serious, basic, essential norm of the internal market with zero repercussion and zero criticism from lawmakers, elected officials or politicians.
So anyone who complains that UK might break its commitments when they effectively leave the EU institutions should be strongly castigated for allowing Germany to break basic principles forever.
This is yet another example of why the UK has left the undemocratic, incompetent and evil EU (better known as the EUSSR).
I dunno. They are not that bad. Belgium is blessed with the most extensive, lit, road network in the whole EU. Must be all those solar panels installed.
As a Brit, let me say, who gives a toss. We trade at a loss of €100 billion with the EU. Anything we can do to limit that trade will benefit us.
If they want to get arsey, it will cost them a lot more.
Clauswitz said “[trade] war is the continuation of diplomacy by other means”. The word in the square brackets is my up-dated version.
Let’s ask Pascal Canfin if he supports offering immediately, unconditionally, strictly “for free”, all EURATOM freedoms to UK, in order to avoid any issue on starting the EDF built and (hopefully) run UK “EPR” reactor(s)?
That is freedom to trade uranium and MOx and all related devices and technologies.
Ask real questions. Put Mr Canfin “under the gun”.
I assume UK will remain in the Nord Pool Group and the North Sea cable Denmark to England cable will go ahead as planned!?
I wonder if the electricity trading, mostly import to UK, will continue business as usual. If not, maybe UK is in for a rough time. UK seems very dependent on supply from France, which I interpret at a deficit in UK’s own base power capacity. If UK runs into supply issues, they can resolve this by increasing the price per kWh or turn flexible by building some modern coal power plants in a hurry 🙂
Nope! 3 day working week, already been done.
Hopefully the strategic folly of renewables will dawn on the British government.
Further proof thaty carbon taxes, prices etc are nothing to do with global warming
If I was a minister I’d be very cautious about getting involved with COP26. It’s going to fail – as has the Paris Agreement.
(Btw what was the SADDEST thing about the Paris Agreement? When the Agreement was reached by adjusting ‘will’ to ‘should’ the entire Press Office exploded with joy. Not a single crusty cynical old journo said. ‘Hey chaps, this is all crap, isn’t it?
The UK should refuse to pay a £ in carbon taxes.
What’s going to happen? Will UK get kicked out of the EU?…
It’s delightful the EU showed so quickly the UK made the right decision to escape the tyranny of these unelected EU hacks.
Pace Ursula (fond’a Lyin’), it is the rump EU that risks “splendid isolation” with their carbon border adjustment scheme.
Socialist Europe was put in its place the last time it tried to impose ’emissions’ trading on unwilling trading partners. In 2011, or thereabouts, they proposed to apply the European ’emissions’ trading scheme to all aircraft flights within and to and from Europe. It is claimed that several countries threatened retaliation – for example:
https://www.theguardian.com/environment/2012/mar/09/airbus-eu-carbon-trading-chinese?INTCMP=ILCNETTXT3487
and:
https://www.reuters.com/article/us-airshow-idUSTRE81C0H120120213
Europe resiled from the proposal, limiting it only to flights within Europe.
https://www.transportenvironment.org/state-aviation-ets
The article suggests that a kerosene tax is needed:
That figure of €9.2bn must be very tempting for government. But will it make any difference, other than to raise another small fortune for government to waste – and of course, knocking some of those beastly lower-class people out of the travel market, making tourist destinations less crowded for the ruling class? [Beastly lower-class people – carbon based beings! Is that what the elites mean when they refer to ‘carbon pollution’!] Under extreme pressure from airlines, aero engine manufacturers have made enormous gains in reducing fuel consumption. A tax will not change what is already happening.
A lot of dreamers are fantasizing about lithium battery powered electric aircraft, just as they are fantasizing about lithium battery powered cars. But issues such as charge time, gradual degradation of performance, explosions, fire and thermal runaway make them impractical and scary. Electric powered vehicles will become practicable in the future as new materials are developed that give us instantly-rechargeable, deep-cycling ultra-capacitors. Here’s an example of what is happening today:
https://www.skeletontech.com/ultracapacitor-technology
“French MEP Pascal Canfin told reporters on Monday (27 January) that the EU “should be tough” and “shouldn’t be afraid of an economic no-deal in December”, as the next round of Brexit-based negotiations loom on the horizon.”
Though guy is (pretends to be) though on UK.
Not so much on China and India…
I remember when the tea party brought up the issue of a potential border adjustment tax. The world was up in arms on this purported injustice. When in fact border adjustment taxes are a pretty good way to equalize for any kind of unjust issue some producer that exports into your market have. Of course its also some sort of protectionism but if this is what a single country wants, who are we to deny it to them? Boris could ignore all those calls and start making Britain really competitive. Strengthen small and medium-sized business, hacking away on regulation overkill, providing a basis for cheap energy, … Wealth is good for the environment.