Industrial winners and losers in the carbon tax game

Major energy users are campaigning fiercely against the European Commission's proposals for a carbon/energy tax - and have persuaded a parliamentary inquiry to back their case. But much of the evidence suggests that even energy-intensive sectors would experience little increase in production costs or serious reductions in competitiveness - while other industries, and consumers in general, may even benefit. The ways in which the tax revenues are recycled will also be crucial in determining its economic and industrial impacts.

Despite the controversy which greeted their publication in September, the Commission was given the go-ahead by EC Ministers in December to work up its ideas in more detail. The debate will enter a crucial phase when these are discussed by Environment Ministers on 26 May, just a few days before the Earth Summit begins in Brazil.

To recap, last September's proposals envisaged the imposition of a tax split 50:50 between the carbon and energy

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