Saying that it takes a crisis to achieve any major progress in European policy is stating the obvious. For many years the golden rule was that the European Commission’s role was simply to create the basic conditions needed for optimal functioning of the single market. Various developments mean the thinking in this respect now seems to be changing in regard to market intervention at a European level.
The crises in recent years have forced the Commission to take on a more active role in the market; indeed, we have seen more and more situations where legal action has been taken to force governments to intervene, and the balance between countries favouring a free market economy and those with a tradition of more active state involvement seems to be tilting increasingly towards the latter. One of the areas where this is becoming particularly evident is in the pricing of externalities.
Introducing a charge for emissions would create a financial incentive to pursue innovation and ultimately a completely circular economy. So will ‘the polluter pays’ be Europe’s new slogan?
This forecast highlights the ins and outs.