Brussels, 27 July 2007

EURO COOP is the European Community of Consumer Co-operatives. Its Secretariat is based in Brussels. Its members are the national organisations of consumer co-operatives in 16 European countries. Created in 1957, EURO COOP today represents over 3,200 local and regional cooperatives, the members of which amount to more than 22 million consumers across Europe.

Euro Coop welcomes the European Commission’s Green Paper on market-based instruments for environment and related policy purposes {SEC(2007) 388}. It is a useful effort to map out a direction, which the EU should take in an area of particular complexity.

Euro Coop believes that market-based instruments for environment purposes can be a useful addition to the measures that the European Union can take to promote sustainable development, to limit environmental damage and to preserve and improve the environment for the future. Euro Coop does, however, recognise that appropriate environmental legislation backed up by adequate enforcement measures are nonetheless necessary to protect the environment. Therefore, environmental marketbased instruments should not be seen as a replacement for environmental legislation since both tools are complementary.

Euro Coop recognises that it has been difficult to make progress on EU wide taxes at a European level so far because many Member States want decisions and tax policies to be taken at national rather than at EU level. Environmental concerns are, in several respects, cross border issues and if environmental taxes are to be implemented, we should therefore opt for introducing such marketbased instruments at EU level to ensure consistency for consumers.

In general, Euro Coop supports a shift towards taxation of activities that deplete natural resources or pollute the environment. Thereby, environmental taxes can support 'the Polluter (or User) Pays' principle as well as the EU’s 6th Environmental Action program, the EU’s Sustainable Development Strategy and the Lisbon Strategy. However, there is a need to ensure that in the event of any such change the taxation burden does not fall disproportionately onto poorer consumers. For example, increased taxes on certain fuels will affect poor consumers more, unless they are duly compensated. There is potential for environmental taxes to be regressive in their effect. Furthermore, consumers will become cynical about tax revenues raised for environmental reasons unless it can be clearly demonstrated that the revenues obtained lead to real environment benefits.

The Green paper suggests that Community minimum tax levels should be divided into energy and environmental elements, which would then be reflected at national level in the form of energy and environmental taxes. This would lead to the introduction of a tax on the energy contents of all fuelstogether with a differentiated environmental tax aimed at distinguishing between greenhouse and nongreenhouses gas emissions of the fuel used. This would support the generation of green energy and follow a direction European consumer co-ops have been following for many years now.

Euro Coop also considers that the nuclear alternative should not be taken into account as a solution to the energy and climate change problem. As consumer-owned businesses we strongly feel that, although nuclear energy does not directly emit CO2, further and worse risks could arise from the use of such energy. Euro Coop therefore thinks that the green taxation of nuclear power has to be based on a strong implementation of the precautionary principle.

The paper also explores other areas where the market-based instruments might be applied, such as surface transport and shipping. In this regard, Euro Coop believes that in principle all sectors where green market-based instruments can reduce the environmental impact caused by polluting economical activities should be included in the revised Energy Tax Directive. Therefore, Euro Coop also welcomes each initiative aimed at including the environmental cost or benefit of a product in its market price, thus ensuring health and environmental costs are duly taken into account.

For more information please contact:
Rodrigo Gouveia - Secretary General
E-mail: infoateurocoop.coop
Tel.: +32-2-285-00-70 - Fax.: +32-2-231-07-57

Rosita Zilli - Policy Adviser E-mail: rzilliateurocoop.coop
Tel.: +32-2-285-00-72 - Fax.: +32-2-231-07-57