European Union policymakers may scrap subsidies for energy, water and transport and impose new taxes as they seek to curb use of finite resources and accelerate the shift towards a lower carbon economy, a draft text seen by Reuters on Wednesday showed. The European Commission is expected to publish a 2050 "Roadmap to a Resource Efficient Europe" next week to lay out plans to limit waste and improve efficiency.
"Member states are invited to prepare plans and timetables to phase out (environmentally harmful subsidies, or EHS) as part of their national reform programmes," the draft copy of the plan said, noting that state-backed programmes in the field of energy, transport and water often carry a negative environmental impact.
"The Commission will monitor and guide the phasing out of EHS in the European Semester as of 2012," the draft says, adding that by 2013 aid decisions will be made on the basis of resource efficiency. But with power over fiscal and parts of subsidy policy in the hands of national governments, and EU industry wary of adding more cost to production, it is unclear how much of the Commission's roadmap will be adopted into national legislation. "By 2020 (environmentally harmful subsidies) will be phased out, with transitional measures for people in need," the draft said.
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