The Carbon/Energy Tax Proposal

Abstract

The Carbon/Energy Tax proposal has replaced the Large Combustion Plant Directive as the most divisive EU environmental proposal. While the LCP Proposal promised unprecedented environmental regulatory costs for member states, the US Supreme Court Chief Justice John Marshall’s famous quotation, ‘the power to tax involves the power to destroy’, explains the tax issue’s profile. The prospect of EU institutions gaining taxation/fiscal power in environmental matters with the likely economic consequences created a firestorm seldom witnessed in EU history. Moreover, the tax was an instrument intended to address an environmental problem involving great scientific and policy uncertainty: climate change and global warming. Many questions continue to be raised about how human activity affects the climate situation. Equally important, effective remedies are not evident. Global warming has a diffuse impact compared to hazardous waste and may require significant resources to resolve to any noticeable degree.