Tax protests paralyze Europe's "green" policies

Note: Europe is suffering under "green" taxes that are one fifth what the U.S. politicians are proposing for us after this next election.

Fuel protests herald grim times for European green policy
DOUG SAUNDERS
From Wednesday's Globe and Mail
May 28, 2008 at 2:06 AM EDT

LONDON — After hundreds of angry drivers shut down highways in England Tuesday in protest against green automobile taxes, and drivers and fishermen in France and Spain paralyzed their ports and roads in a fuel-tax protest, politicians began to signal Europe's ambitious emission-control policies may soon have to be abandoned.

While Europe has led the way in using tax incentives to encourage people to buy low-emission cars and to build carbon-neutral houses in order to meet Kyoto targets, it has become increasingly apparent that inflation-battered voters are no longer willing to go along.

Political leaders in Britain and France are seeking the reversal of tax policies designed to make polluting vehicles more expensive, with French President Nicolas Sarkozy and some British ministers calling on their own governments and the European Union to relax ecologically friendly taxes in order to give relief to citizens suffering from fast-rising food and fuel prices.

As Prime Minister Stephen Harper launches a European tour Wednesday to persuade leaders that Canada's greenhouse-gas policies are acceptable, he may find the gaps between their views have narrowed, as formerly ecologically assertive leaders react to rising voter backlash against green policies.

In Britain, drivers Tuesday held a mass traffic stoppage over a new surtax, introduced by Prime Minister Gordon Brown as a way to encourage people to buy more fuel-efficient cars, that would have raised the average family's vehicle taxes by $80, with higher-polluting vehicles paying more and very efficient ones being exempt.

After Tuesday's protest and days of anger in the news media, members of Mr. Brown's Labour Party government began to call for a reversal. Parliamentary Secretary Rob Marris complained in a radio interview that “Millions of people will be affected. … I am in favour of prospective green taxes to change people's decisions when they buy a car, but to tax them heavily on a car when it was bought seven years ago doesn't seem a good way to go and it will discredit green taxes.”

Officials close to Chancellor of the Exchequer Allistair Darling hinted strongly last night that he is considering a complete reversal of the tax and a reconsideration of other tax-led emissions policies.

“The Chancellor is listening to what people are saying about vehicle excise duty, as he has done on a number of occasions recently about tax rises,” said John Hutton, Mr. Brown's business secretary. “We are trying to get the balance right between encouraging choices to go green but not hammering people.”

A survey this month by the British polling firm Opinium showed that more than 70 per cent of voters are not willing to pay any higher taxes in order to combat climate change. There are indications that such opinions are increasingly prevalent across Europe as fuel and food prices rise and consumer-credit crises become widespread, making politicians increasingly out of step with their constituents on climate policy.

Mr. Sarkozy, joined by Spanish ministers yesterday, called on the EU to rescind part of the value-added tax it places on fuel, after fuel-tax strikes caused much of France to grind to a halt last week and resulted in clashes with riot police yesterday. Italian, Greek and Portuguese fishermen have threatened to join the protests later this week.

While the European fuel tax is not specifically tagged as green, environmental groups have praised high fuel taxation as an important part of Europe's emissions-reduction strategy, and warned that tax cuts on fuel will discourage industries and consumers from pursuing low-emission equipment and methods.

But it appears that the EU is already moderating its green stand on fuel in response to consumer pressure. While EU leaders had pledged last year to have 10 per cent of all road transportation fuelled with biofuel sources by 2020, a report from the European Commission yesterday backed away from that pledge, adding a new clause stating that “the target has never been to reach 10-per-cent biofuels at any price. It is 10-per-cent biofuels under strict conditions.”

Such reversals led the chief United Nations climate-change official to criticize Europe for losing its leading position on emission controls.

“The whole world gave a standing ovation when Europe announced last year its willingness to reduce its emissions by 20 per cent, and perhaps by 30 per cent if others [such as Canada] join in,” said Yvo de Boer, executive secretary of the UN Framework Convention on Climate Change, according to the Agence France-Press news agency.

“But now this position is under a lot of pressure, especially from European Union industries. … I am not seeing this push yet.”

Mr. Brown had joined other European leaders two years ago in placing targeted taxes on large vehicles, fuel, plastic bags and air travel with the goal of reducing carbon emissions by 60 per cent by 2050, in accordance with the Kyoto agreement. Experts had said that even with these policies, that target would be difficult to meet.

But European voters have begun to rebel against these measures. For example, a British tax incentive adopted last year to encourage people to build carbon-neutral homes, which would typically allow buyers to waive $20,000 in sales tax if the house is made to low-emissions standards, had been adopted by only three home buyers as of January. Builders said they had spurned the exemption because carbon-neutral practices could add 10 per cent to the cost of a house.

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