On July 14, the European Commission presented its package of legislative proposals aimed at achieving the community's increased climate ambitions. One of the main recommendations of the group of documents is the introduction of a new central carbon pricing system affecting household buildings and transport. The proposed legislation's expected environmental benefits are small, but it leads to a significant increase in energy prices, imposes a heavy burden on families, does not take into account the differences between member states and has low social support, which is why Századvég does not recommend its introduction.

On July 14, Ursula von der Leyen, together with several leaders of the institution, presented the package of climate protection proposals of the European Commission, which had been awaited for six months. The primary motivation behind the preparation of the documents was the 2030 emission reduction target adopted by the Council last December, increased from 40 to 55 percent. The released package presents the commission's recommendations promoting the practical implementation of the raised climate protection ambition, the adoption of which will be decided by the Parliament and the Council - you can read on the Századvég website.

A critical element of the package is the introduction of a new, central carbon dioxide trading system, which would charge emissions from the energy use of residential buildings and road transport.

With the amendment, the regulation of small polluters would be transferred from the competence of the Member States to the competence of the EU, which would result in uniform carbon prices independent of income situation, geographical features and other differences.

The proposal can be matched for households by introducing a new carbon tax, which would raise utilities and fuel prices to the same extent in all member states. The following four main concerns can be identified in relation to the draft legislation.

I. Low environmental impact

While companies have sufficient resources to flexibly adapt to a price increase due to an introduced environmental protection tax, the room for maneuver for households is much narrower. The energy efficiency of residential consumers' buildings and means of transport, as well as the type of fuel used in them, are features that are difficult to change for financial and other reasons. A price increase caused by a carbon tax imposed on households would therefore only result in a minimal reduction in consumption (and thus emissions), the effect would be a drastic increase in the burden on families.

II. Injustice

Due to the income differences between the member states of the European Union, it is unacceptable that every family in every country pays the same amount for emissions of harmful substances. Uniform costs would put a disproportionately high burden on lower-income households, which would reduce cohesion between member states, thus acting contrary to the basic values ​​of the European Union.

III. Lack of compliance with Member State rules

There are very different consumer protection, price and other regulations in force in each member state regarding fuels and especially household energy. These rule systems mostly serve multidimensional goals, with different weight in each member state, with a complex system of regulatory tools necessary to achieve them. The Commission's proposal would strongly undermine the fulfillment of the policy goals of each member state, which are adjusted to the social expectations, and would also generate significant administrative, economic and sovereignty problems. For example, since utilities are currently the cheapest in Hungary, the introduction of a unified central tax would proportionally increase the energy costs of domestic households to the greatest extent.

ARC. Lack of social support

domestic and European public opinion polls previously conducted by Századvég, A good example of the social consequences of a policy intervention similar to the proposal in Brussels is France, where three years ago a wave of social discontent erupted due to a newly introduced fuel tax, known in the international press as a yellow vest demonstration.

The Commission's proposal would therefore cause a significant increase in residential energy prices throughout Europe, which would particularly adversely affect Hungarian families and jeopardize the results of the Hungarian Government's Utility Reduction Program. Due to its serious negative social effects and negligible environmental benefits, Századvég does not consider the legislative proposal in its current form to be acceptable.

Source: Századvég / hirado.hu

The cover photo is an illustration. Thierry Monasse / Anadolu Agency / AFP