The Netherlands launches a carbon tax to enforce the proposed National Energy and Climate Plan

The Netherlands launches a carbon tax to enforce the proposed National Energy and Climate Plan, reports Siebe Schootstra from Carbonmission.nl.

Yesterday the financial consequences of the Dutch climate deal were presented to the public, by the Planbureau voor de Leefomgeving (PBL) and the Centraal Planbureau (CPB). These planning agencies calculated proposed plans and the effects of measurements on carbon emissions abatement. Their conclusion is that the Dutch target for emission reduction with 49% for 2030 compared to 1990 is hardly achievable, but falls within a possible bandwidth which also encloses the EU goal of 40%. The financial outcome of calculations of the extra measurements defined in the concept climate deal ads a 1,6 to 1,9 billion euro per year to the budget needed. On a national level that comes cheaply, but CPB calculated that this will decrease the purchasing power of households with minus 1,3% as an average, and even 1.8% for lower income households.

Dutch prime minister Mark Rutte reacted on the presentation of these figures in a subsequent press conference with the announcement that a carbon tax will be launched, to enhance CO2-reduction especially in the industry, and to attenuate the cost of mitigation measurements born by public households. With this remarkable statement he distanced himself from opposite parties, only one week before council elections, to take the wind out of the sails. For many months now the climate debate in the Netherlands has polarized because of the high costs of emissions abatement. Maybe, with this move, the climate agreements is saved and can be finalized before summer.

The industrial sector, companies operating under EU ETS who always rejected extra charges on top of the EUA-price, is devided. Although a reasonable tax could be accepted and drive innovations, like Dutch Central Bank (DNB) earlier already stated, there is no certainty in the effect of a local tax. Most of the industrial plants have their head office outside the Netherlands and might reconsider planned investments. If a local tax scheme is not shaped wisely, it might backfire.

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