The Carbon Tax Is Frightening Beijing

Andrea Bonanni
Columnist of the daily La Repubblica

After much talk, many promises and endless controversies, the environmental question begins to bite into the reality of global geopolitics. Yesterday China was the protagonist of a double game. In Shanghai, former Secretary of State John Kerry, President Biden's special envoy for climate, met with his Chinese counterpart to discuss, among other things, President Xi Jinping's participation in the conference call on environmental protection that Biden organized for 22 and 23 April, with the participation of about forty world leaders. In a phase of worsening of relations between the United States and China, the participation of the Chinese President would be a sign of relaxation at least on one front, the environmental one, in which the dialogue between the two major polluters of the planet could be beneficial to both. The participation of Xi Jinping, at the moment, has not yet been officially confirmed.

Simultaneously with the meeting in Shanghai, Xi himself participated in a teleconference in Beijing with Angela Merkel and Emmanuel Macron, again on the issue of environmental protection. The fact that the Chinese President has chosen the leaders of the two major EU countries as his interlocutors confirms the reluctance of the authoritarian powers to dialogue with the European institutions, but it is also an indication of a certain realism on which are the real decision-making centers of the strategies that later the EU will make its own. That Merkel and Macron are willing to play that game, on the other hand, is so obvious that it is not even newsworthy.

But why did Xi Jinping suddenly feel the need to confront Europe on environmental issues? Because the EU is preparing to translate its world leadership in the ecological field from words to deeds. And it will do so with a measure, the carbon tax, which already scares the great polluters of the planet. According to the decisions of the summit of last July, which gave way to the NextGenEu plan for post-Covid financing, the carbon tax will be one of the European taxes thanks to which the Commission will be able to repay the bonds issued to create the Recovery Fund and other financial anti-epidemic instruments. The European Parliament has already approved the principle, and the Commission is preparing to present a detailed proposal for the levy to go into operation in 2023.

The idea behind the carbon tax is simple. As Europe has given itself stricter rules and more ambitious targets than those of the rest of the world in terms of reducing emissions, European industry will have to bear additional costs to meet the new environmental parameters. In order to avoid unfair competition, and a possible relocation of its industries, the EU will protect itself by imposing a duty on incoming goods produced with methods that do not respect Community parameters. In this way, the competitive advantage of countries that allow highly polluting production methods, such as China, India or Brazil, but also, in certain sectors, the United States, should be offset, at least in part.

Of course, Xi Jinping doesn't like all of this. "The response to climate change is a common cause of humanity. This is why it must not become a geopolitical question, or a pretext for building trade barriers", the Chinese President told Merkel and Macron, solemnly making the commitment to achieve carbon neutrality by 2060 (ten years after the EU), and hinting that China is ready for greater openings for a "fair, just and non-discriminatory" trading climate. In other words, Xi tells Europeans, forget about the carbon tax and we will offer you easier access to our market.

The question, as can be understood, is crucial. And, certainly, it will be discussed in the next world conferences on the topic: the Cop15 on biodiversity, which will be held in China in October, and above all the Cop26 on climate, which will open in Scotland in November, and where Italy will play an essential role as president of the G7. On the other hand, without a carbon tax that defends European industry from competition from polluting countries, the EU could hardly pursue its emissions reduction objectives and maintain world leadership in a sector that is at the same time of great economic importance and of enormous political significance.