Gov't changes climate tune: less tax on citizens, CO2 tax on businesses

The Dutch government wants to reduce the energy costs for citizens and let the industry pay more for the Netherlands' climate plans, Prime Minister Mark Rutte said in a response to the Netherlands' environmental assessment agency PBL and central planning office CPB's calculations of the climate agreement. This will involve less energy taxes on citizens, and a CO2 tax on companies, NOS reports

The two agencies calculated the consequences of the 600 proposals in the climate agreement, which encompasses the Dutch contribution to fighting global warming. The government wants to reduce CO2 emissions by 49 percent by 2030, when compared to 1990. This amounts to a reduction of about 48.7 megatons of greenhouse gas emissions. According to the PBL, the existing plans will result in a decrease of between 31 and 52 megatons, but the PBL considers it unlikely that the government's goal o 48.7 megatons will be reached

The CPB calculated what effect the climate plans will have on purchasing power. It concluded that households will lose 1.3 percent of purchasing power on average in 2030, with low income households being hit the hardest. Citizens also have to pay more than the business community on the climate plans, the CPB said.

The government therefore made adjustments to its plans. They are looking at a CO2 tax, which companies will have to pay if the emit too much greenhouse gasses. Rutte spoke of a "sensible tax", as companies must also be prevented from going abroad. The money raised with this tax will be used to make industry more sustainable. The cabinet will present a detailed plan for a CO2 tax at the end of April. 

The government initially intended to fine the industry for polluting activities in a so-called bonus- and penalty system. But the agencies concluded that this will not result in a big enough CO2 reduction. The industry itself is very much set against a CO2 tax, while environmental organizations, trade union FNV, and left-wing parties like GroenLinks and PvdA have been calling for such a tax for months. 

Rutte also acknowledged that the distribution of the climate burdens was not good. "We want a fair distribution", he said. The government is therefore putting a third of the costs on households, and two thirds on companies. In the original agreement, this was 50-50. 

The main changes to the plans in the climate agreement, according to NOS:

  • The energy tax on citizens will be reduced from 2020
  • A "sensible" CO2 tax will be imposed on companies
  • An end will be put to the "over-subsidization" of new electric cars
  • There will be more "support" for the second-hand electric car market
  • Agriculture will make a "bigger contribution" for extra money
  • The planned increase in fixed costs for motorists will be scrapped
  • There will be less CO2 storage

Environmental organizations Milieudefensie, Greenpeace, Natuur en Milieu, Natuur en Mileufederaties, and trade union FNV called the quick changes to the climate agreement a promising sign. In a joint response they said: "This is what the climate needs and why 40 thousand people took to the streets on Sunday. We now have to be satisfied with the words of Rutte and [Economic Affairs and Climate Minister Eric] Wiebes, but we will keep the government to these words. We are ready to make agreements."