Europe's Climate Commissioner not in favour of carbon tax

The European Union, which is not in favour of the carbon tax mooted recently by the European Commission and advocated by French President Nicholas Sarkozy, today favoured a "cap and trade system" for emission cuts.

The Carbon Tax proposal involves imposition of a tax on goods that are made from processes not considered to be environment friendly. BASIC countries -- Brazil, South Africa, India and China - are united on the issue of fighting Carbon Tax proposed by the rich countries.

"I think the best instrument the world has seen so far when it comes to international level that is to try to get a cap and trade system that''s because the best thing about the cap and trade system is that you can not just pay the tax you also actually have to reduce taxes," said EU Commissioner for Climate Action Conni Hedegaard, who is on a visit to India.

Earlier on Friday, Hedegaard met Environment Minister Jairam Ramesh and both leaders discussed Carbon Tax issue along with their respective stand and strategies on the international negotiations to ensure specific deliverables from climate talks in Mexico due in November this year.

India had reacted sharply and raised the red flag on the EU's proposal of Carbon Tax and Ramesh even warned that it could exercise the option of moving the WTO dispute settlement body if the European Union and the US impose the tax on Indian exports.

Ramesh also said barriers like anti-emission tax would not be compatible with the WTO rules.

India, which is against any legally binding agreement, had voluntarily agreed to reduce its carbon emissions by 20-25 per cent by 2020 and had opposed attempts by the rich nations to mix trade and climate matters.

However, the EU Climate Commissioner believes that there is urgency on the climate matters, and the Cap and Tax method is the effective way to speed up the emission cuts.

She said: "I think a cap and trade system is very much preferred to a common tax system having said that in Europe we have many common taxes as well we have many energy taxes, so there are many ways to doing this, internationally best way to ensure action is through cap and trade system."

The visiting EU commissioner also defended IPCC fourth assessment report, which is under attack over its misplaced assessment on the melting of glaciers.

Hedegaard said: "I must say that I have seen nothing yet that profoundly changes the main conclusion in the fourth assessment report."