ECONOMY

Stop subsidizing environmentally harmful industries, EU ministers say

MAASTRICHT (Reuters) – Europe must stop subsidizing environmentally harmful industries, such as mining, and start developing more eco-friendly technology to boost its competitiveness, EU environment ministers said on Saturday. Meeting in the Netherlands, the current holder of the EU presidency, the ministers worked on proposals aimed at making the environment a central part of the 25-nation bloc’s growth initiatives. «The message today is that environment is not a problem but a chance for sound economic development,» Dutch State Secretary for Environment Pieter van Geel told reporters. He said the ministers would recommend phasing out subsidies that hurt the environment and promote tax incentives to persuade industries to invest in products that are ecologically sound. «We still have in Europe some environmentally harmful subsidies. We still have no VAT on tickets and kerosene in the aviation sector… and some countries are still subsidizing coal,» van Geel said. He said European countries were implicitly subsidizing the aviation sector by not taxing its fuel consumption. Austrian Minister Josef Proell told Reuters tax incentives could boost the production of clean energy. «We have to change our tax system, I think, to support, for example, the production of green energy, to support the system of biofuels,» he said. Ministers are pushing to keep environment as one of three key parts of an EU plan drafted in Lisbon four years ago to make Europe the world’s most competitive economy by 2010. Their recommendations will be passed on to former Dutch Prime Minister Wim Kok, who is charged with reviewing what is known as the Lisbon agenda. Broader use of new technology was one way discussed in Lisbon to boost the continent’s competitiveness, and environment ministers said on Saturday eco-technology was a chance for EU businesses to enter emerging markets like China. «Not only in China but in large parts of the developing world there is a big market for (it) if Europe can invest in environmental technology,» said Catherine Day, director-general of the European Commission’s environment unit. «I think there was a feeling that eco-efficiency has to be a part of Europe’s path to growth and that this would be good for business, good for the bottom line and good for the environment as well.» Businesses and environment associations called for the EU to be specific about what it wanted. «It is essential to make the market work for eco-innovation. The (Dutch) presidency should have made more specific proposals on environmental tax reform and public procurement,» said John Hontelez, head of the European Environmental Bureau, which groups non-governmental organizations, in a statement ahead of the meeting on Friday. The World Business Council for Sustainable Development, which groups some 170 of the world’s biggest companies, urged the EU to come up with clearer guidelines on environment initiatives like the emissions trading scheme which is to go into effect in January 2005.