UPDATE 2-Germany calls carbon tariffs "eco-imperialism"

Fri Jul 24, 2009 10:42am EDT

* Germany says French idea would directly violate WTO rules

* Swedish EU presidency says no official proposal received

* France: tariffs should be an option if Copenhagen fails

(Recasts, adds French minister quotes)

By Mia Shanley and Ilona Wissenbach

ARE, Sweden, July 24 (Reuters) - European Union environment chiefs warned against trying to impose "carbon tariffs" on countries that do not join a global deal on tackling greenhouse gases, but France said they could be used as a last resort.

Rich nations are worried that by making their industries pay for permits to emit carbon dioxide they will lose market share to cheaper imports from countries with no such carbon curbs. Border tariffs could be used to level the playing field.

France says carbon tariffs could play a role if countries fail to agree a global climate deal in Copenhagen in December, but Germany called the idea a form of "eco-imperialism" and a direct violation of WTO rules.

The issue of greenhouse tariffs has met bitter opposition from developing countries such as China and India, which count on the developed world to buy their exports to help them cope with the fallout from the worst financial crisis in decades.

Matthias Machnig, Germany's State Secretary for the Environment, told a news briefing on Friday tariffs on imports from countries that do not tackle carbon emissions would send the wrong signal to the international community.

"There are two problems -- the WTO (World Trade Organisation), and the signal would be that this is a new form of eco-imperialism," Machnig said. "I don't think this is a very helpful signal for the international negotiations."

European environment and energy ministers are meeting in Sweden to try to come up with a single vision of how the 27-member bloc will fight global warming.

The meeting has been described as a "final training camp" ahead of a summit later this year in Copenhagen when negotiations on a successor to the Kyoto Protocol take place.

French Energy Minister Jean-Louis Borloo said EU member states needed urgently to step up to the plate and get more developed nations on board while lashing out at the United States and Canada for moving too slowly on climate change.

Carbon tariffs to protect European industry, although not ideal, should be an option if Copenhagen fails, he told Reuters.

"This is not an end in itself. But we will have to explain ourselves to the European workers," he said.

U.S. LEGISLATION

The U.S. House of Representatives has already passed legislation that contains carbon tariffs. It would allow the United States to impose duties on imports of carbon-intensive goods such as steel, cement, paper and glass from countries that have not taken steps to reduce their own emissions.

But Swedish Environment Minister Andreas Carlgren, whose country holds the six-month European Union presidency, said member states currently had no "plan B" beyond landing a deal in Copenhagen. He said there was as yet no official proposal on the table from the French regarding carbon tariffs. "We are absolutely against each try to make use of green protectionism," Carlgren told Reuters. "There should be no threat of borders, of walls or barriers for imports from developing countries."

EU Energy Commissioner Andris Piebalgs has said member states should keep the French idea in mind, but also worries how such tariffs could be viewed by other countries.

China said earlier this month tariffs would violate the rules of the WTO and the spirit of the Kyoto Protocol.

The WTO's says import tariffs can be imposed if such taxes are also imposed on a country's own industry to ensure a level playing field, although such tariffs would run counter to its goal of reducing barriers to trade. (Additional reporting by Johan Ahlander and Julien Toyer; editing by Philippa Fletcher)

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