An effective carbon fee

There are many possible policy measures to combat climate change, but there is only one policy measure that directly reduces the consumption of fossil fuels and thus reduces CO2 emissions: an effective price on CO2 emissions

The EU emissions trading scheme is an attempt to tax CO2 emissions, but has proved to be a failure in practice. The prices of an allowance have been around 5€ per tonne of CO2 for years, far too low to have any effect. It wasn't until 2018 that prices started to rise somewhat, but they are still too low. The EU also regulates only +-45% of all emissions. In many sectors it is still possible to pollute free of charge.

As long as there is no effective emission price at the European level, we demand a national carbon fee on all CO2 emissions as a transitional solution. This is the most cost-effective way to achieve the Belgian reduction targets, and also to promote a European solution in the long term. To give the economy time to adapt, the carbon tax must start at a low level and be increased annually.

In the medium term, our goal is an effective carbon fee at the European level.

The carbon dividend: A fair distribution of the revenue

The entire proceeds of the carbon tax will be distributed proportionally over the population. Every citizen receives a carbon dividend (or climate income)

The advantage of the climate dividend is that the average tax burden does not increase. People with a lower carbon footprint benefit from it; people with a higher than average carbon footprint will have to pay extra. In general, low and middle incomes will benefit financially.

Macroeconomic studies have shown that a carbon fee and dividend has a positive impact on economic growth, employment and public health.

Ambitious emission reductions in Europe

In Europe, we must consistently continue to build on the Paris Climate Agreement and aim to reduce greenhouse gas emissions by at least 50% by 2030 compared to 1990.

A border carbon adjustment

How can we avoid that the CO2 emissions we have saved in Belgium are emitted in other countries? In order to avoid this so-called "carbon leakage", and also to protect our companies and our economy, an import tax on products from countries without a carbon fee and an export bonus for products that are exported to countries without a carbon fee must be introduced.

 

This also requires cooperation at the European level.