Taxing polluters has so far been mostly a national matter, but the European Commission now wants a fairer decision-making process across the bloc.

Environmental tax matters across the EU should be decided by a majority vote, the bloc’s energy commissioner Miguel Arias Cañete said this week.

The proposal followed the publication of the latest report by the European Commission on the state of the energy union, which monitors progress made on the transition towards clean energy.

Taxation is one of the few EU policy areas that requires agreement by all 28 national governments before being approved. This means that currently any tax proposal by the Commission can be blocked if one country disagrees.

This was the case with energy tax proposals dating back to 2011, and more recently with an aviation tax championed by the Netherlands.

The Commission is now proposing a shift from unanimity to qualified majority voting.

In a press conference on Tuesday, Cañete argued that in today’s modern and integrated EU, a purely national approach to taxation no longer works and unanimity is neither a practical nor an effective way of decision-making.

“We urgently need to align energy union objectives to taxation. For example, the polluter pays principle doesn’t exist in the world of energy taxation. We are giving €5 billion of subsidies a year to fossil fuels while there’s no system of taxation that incentivises renewables.”

 

 

Bas Eickhout, a member of the European Green Party, welcomed the news arguing that “taxation is key in order to stress how the EU is failing in creating a fair price for pollution.” But he also warned that any change to the system is unlikely to be agreed in the way it was proposed by the Commission as – ironically – the European Council still requires a unanimous vote by member states in order to scrap the unanimity rule.

Environmental taxation has recently become the subject of a heated debate across Europe following the gilets jaunes or yellow vests riots in France. Born as a reactionary movement to oppose increasing taxes on diesel, the movement soon morphed into a broader protest against detrimental economic policies.

Environmental campaigners were quick to point out that “there can’t be a green transition without social quality”, and that any effort to increase green taxes should be followed by a decrease in other detrimental taxes such as labour.

Roland Joebstl, a senior policy officer with the European Environmental Bureau (EEB) said:

“Our tax system is distorted, aggravating inequality and harming the planet. We need to fix this and we need European rules for this. Our subsidies to fossil fuels and fiscal free-rides to corporations reward polluters and leave the actors of the green economy behind. EU and national governments must change the course of direction if they want to be on the right side of history.”