Energy

Anti-Carbon Tax Movement Gains Momentum Around the Globe

REUTERS/Daniel Munoz

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Michael Bastasch Energy Editor

Coalitions are rising up in the U.S. and Europe to oppose taxes on carbon dioxide emissions to keep industries from fleeing high energy prices.

In The U.S., conservative groups have joined together to oppose attempts by federal lawmakers to impose a CO2 tax, and in Europe, steel companies are fighting for their lives as high energy taxes and competition from cheap Chinese steel threatens their economic prospects.

In the United Kingdom the plight of the steel industry has moved at least one Conservative Party member to propose abolishing the country’s minimum carbon tax that’s hampering businesses.

“The carbon floor price must go,” said Scottish Conservative Ian Duncan, who promised to write to British Business Secretary Sajid Javid to end the country’s carbon tax floor. Duncan and other conservatives are scrambling to stave off job losses from Tata Steel’s sell-off of U.K. plants.

British manufacturers have joined Duncan’s calls to scrap the U.K.’s carbon tax scheme, especially those in energy-intensive industries like steel producers. The steel industry is under intense competition from Chinese producers and high energy taxes are cramping their business models.

India-based Tata Steel recently sold one of its British plants, and the one company interested in buying the plant will only do so if the U.K. reforms its carbon tax system.

“German and Italian producers are not subject to the same carbon tax giving them an unfair advantage and that discussion will need to be had,” the company Liberty House told the U.K. paper City AM.

In Germany, steel companies are railing against proposed reforms to the European Union’s cap-and-trade system to boost the price of emitting carbon dioxide.

EU policymakers are proposing to raise the price of CO2 permits and reduce the number available in the government-mandated trading market. The EU wants to raise prices to make green energy more economical after the price of CO2 permits fell over the last few years — the price collapse made coal competitive with wind and solar.

“The industrial business model of the German economy is at stake,” Hans Jürgen Kerkhoff, president of the German Steel Association, said of the EU proposal. “The consequences for the German economy would be grave.”

Germany is already saddled with some of the highest energy prices in Europe, largely thanks to taxes slapped on electricity bills to pay for green energy production. Industry, however, gets compensation from the government to offset the higher energy costs, but companies are still required to comply with the EU’s cap-and-trade system.

Proposed EU reforms could cost Germany 380,000 jobs economy-wide, according to a steel industry-backed study, and as much as 30 billion euros in lost economic output.

Across the pond, some 21 U.S. conservative groups signed a petition opposed to a carbon tax. The anti-carbon tax petition, sent out by the American Energy Alliance (AEA), has even caught the attention of Republican presidential candidates who oppose President Barack Obama’s regulatory push to fight global warming.

Republican candidates Donald Trump and Texas Sen. Ted Cruz signed AEA’s petition opposing a carbon tax. The petition also included questions on whether the candidates opposed the federal ethanol mandate, energy subsidies and more restrictions for energy production on federal lands.

The U.S. currently has no federal tax on CO2 emissions, but there have been efforts by Democratic lawmakers to impose such a tax in recent years. Also, many conservatives see the Environmental Protection Agency’s so-called Clean Power Plan as a “backdoor” tax on carbon dioxide.

“The next president’s approach to energy will not only shape our nation’s policies, but will also determine the direction of our economy,” Tom Pyle, AEA’s president, said in a statement. “The responses to our questionnaire provide the American voters with useful insight into how some of the candidates will handle the most pressing energy issues if elected.”

Trump and Cruz aren’t the only Republicans to oppose taxing carbon dioxide emissions. The Republican National Committee recently passed a resolution opposed to a carbon tax.

“That the Republican National Committee hereby resolves that we should protect American families and businesses by not imposing a carbon tax but by opposing a carbon tax and federal and state regulations that create or lead to a carbon tax,” according to the resolution.

The political fights brewing in the U.S. and Europe come after Australia voted in a conservative governing coalition in 2013 on the promise of repealing a carbon tax put in place by the country’s former Labor Prime Minister Julia Gillard. The conservative coalition, led by former Prime Minister Tony Abbott, ran on a low-tax, pro-energy platform promising to eliminate the carbon tax and lower people’s energy bills.

Aussie lawmakers officially repealed the carbon tax in 2014. The tax cost Australians an estimates $8.5 billion a year during its two years of life.

“I should say that at the election, we said to the Australian people, we said to you, that we wanted to build a  strong and prosperous economy for a safe and secure Australia, and every day that is what we have been working to bring about,” Abbott said in a press conference following the repeal vote.

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