The case for a border carbon tax as an own resource to the EU budget

(EurActiv, 21 Jan 2020) To deliver on the flagship European Green Deal, there is a need to introduce a new source of revenues for the EU budget under the form of carbon tax, writes Ivailo Kalfin.

Ivailo Kalfin, a former Bulgarian minister and MEP, was a member of the Monti group on the future EU budget and senior adviser to former budget commissioner Günther Oettinger.

The new European Commission started shaping the instruments intended to secure the delivery on its political priorities. A major cornerstone was the presentation of the sources and the volume of the financial resources needed to achieve the flagship Green Deal.

The EU Green Deal Investment Plan is supposed to mobilize around €1 trillion for the next decade which represents the first tier of the road to climate-neutrality by 2050.

Around half of the money is expected to come from the EU budget, which means that there will be a horizontal streamlining of climate-related measures across all the programs of the Union.

The use of EU funds will require co-financing from the member states’ budgets and the estimate for these funds amounts to €114 billion. Another €300 billion is expected to come from financial instruments related to Invest EU and the ETS instruments.

The remaining €100 billion are supposed to come from the so-called Just Transition Mechanism. This is a tool aiming to assist the transition to climate-neutrality in the regions mostly affected by the expected change.

The Just Transition Mechanism is expected to generate funds from three sources – €7.5 billion especially dedicated in the next Multiannual Financial Framework 2021-2027, used as multiplicator to mobilize a total of €40-50 billion of public money from the national envelopes of the EU funds and the national budgets.

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EurActiv, 21 Jan 2020: The case for a border carbon tax as an own resource to the EU budget