EU Should Punish US With Trade Taxes For Rejecting Kyoto Deal, Says Think Tank

by Jason Gorringe, Tax-News.com, London

09 December 2003

Countries which refuse to sign up to environmental initiatives such as the Kyoto protocol should be made to face trade sanctions and have taxes imposed in their exports, according to UK-based think-tank the New Economics Foundation.

Speaking to the BBC last weekend, spokesman for the foundation, Andrew Simms suggested that this should especially be the case with the United States, which has rejected the Kyoto initiatives to cut greenhouse emissions, despite the fact the country is one of the world’s largest polluters. He argues that the EU should be given the right to "work out the cost of the free ride America is getting" and tax US imports accordingly.

"There are very few signals the United States understands - they do understand economic signals," Mr Simms added.

The Kyoto agreement stipulates that signatory countries must cut their emissions of six gases to 5.2% below their 1990 levels sometime between 2008 and 2012. The protocol will become legally binding when 55 countries have ratified the agreement. However, many observers consider the agreement is already moribund now that President Bush’s refusal to sign up has been followed by signs that Russia (responsible for 17% of global emissions according to the BBC) will also refuse to join the pact, fearful that such a move would stunt economic growth.

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