EU call to end environmentally harmful state subsidies

30. November 2012 | Global PV markets, Industry & Suppliers, Markets & Trends | By:  Max Hall

The draft EU Environmental Action Program (EAP), which would guide the union's environmental policy up to 2020, calls for state subsidies to environmentally harmful activities to be phased out and also demands a taxation shift in emphasis from laborer to polluter.

EU flags.

The EU's draft Environmental Action Program calls for an end to state subsidies to environmentally harmful activity.

In a move which is sure to be welcomed across the renewable energy sector, the proposed seventh EAP – which will now be considered, and potentially watered down by the European Parliament and the Council of the European Union –  also calls for the true environmental cost of activity to be reflected in the policies of its member states.

The draft EAP is built around nine priority objectives, the sixth of which is called: To secure investment for environment and climate policy and get the prices right.

This priority is of most relevance for the photovoltaic and other renewable sectors, and proposes more payments from EU and member state funds for ecosystem services; expanded public-private innovation on eco projects; and an accounting system which properly reflects the value of natural resources, such as biodiversity, and reflects the associated cost of activities which impact such resources.

The EAP also calls for a comprehensive decoupling of resource use from low carbon growth and aims to move towards a low carbon economy.

If the draft form of the EAP survives, it could put the EU on another collision course with the U.K. government, given Chancellor George Osborne's intent to exploit shale gas and fracking in the U.K., as well as the decision by the ruling coalition government to postpone a decision on decarbonizing electricity generation in the country until after the next General Election, due in 2016.

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