Europe is pushing for a minimum world price threshold on carbon dioxide emissions. At the G20 of the ministers of the economy and central bankers underway in Venice, the French Bruno Le Maire proposed to the Venti Grandi to undertake a common commitment. Agreeing on the overall goal of combating global warming, Washington instead emphasizes incentives and subsidies to reduce pollution.
Agreement on the global minimum tax on multinationals
The Big Winds are trying to reduce the distance on the tools to combat climate change, after the agreement on the anti-tax evasion reform for multinational corporations. According to a draft statement circulated on Friday 9 July, the club supports the agreement reached in the OECD on the reallocation of profits and on the minimum global tax of at least 15%. The delegations are working on the lexicon of the document, but political endorsement is taken for granted, barring twists and turns. It will then be up to the technicians to define the details: the new rules against tax havens and tax dumping could come into force in 2023. Although a group of riotous states, including Ireland, Estonia and Hungary, still remains to be persuaded.
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The polluter pays
The discussion on climate is more articulated. Making the polluter pay a price by exporting the European model is very important to Paris, which makes it one of the central points of its agenda at the G20. Le Maire formulated the proposal by speaking at the tax forum on Friday 9 July. «There is a need – he explained – to introduce a fair and efficient price for carbon dioxide emissions. In an ideal world, the price should be the same for everyone, but there are political differences on this goal. Establishing a minimum threshold goes in this direction ». Carbon pricing works, added the French minister, but if it is applied only in the EU it creates “an unsustainable inequality”.
Le Maire reiterated that a “mechanism for adjusting the price of emissions at the border” is needed. The goal is to prevent the rules imposed on European companies from turning into a competitive disadvantage, with production shifting to countries that allow polluting production processes and increasing their exports. Also nullifying the effort to reduce greenhouse gases.
On July 14, the EU Commission will present the “Fit for 55” climate package: among other things, it will include the carbon tax at customs, from which the Union could derive about 10 billion euros a year in revenue. There will also be the reform of the polluting emissions trading system (ETS), to extend it to the maritime sector.