Britain and France will press European Union partners to lower VAT rates on less environmentally damaging products as part of the fight against climate change.
However, some tax experts warned that any such scheme – which might include insulation materials and greener models of cars and refrigerators – could be fraught with practical difficulties and could lead to trade discrimination against less-developed countries.
After holding talks on Friday with Gordon Brown, the British prime minister, President Nicolas Sarkozy of France announced that the two countries’ finance ministers would go to Brussels shortly to press the EU Commission to cut tax rates on greener products. “It is unfair that a polluting car costs less than a car that does not pollute,” Mr Sarkozy told reporters in Paris.
The duo also discussed the situation in Darfur and pressed the United Nations Security Council to act urgently.
Mr Brown said the initiative would send out an important message, encouraging individuals to be more environmentally responsible. He said new market mechanisms could provide powerful incentives for people to switch to less polluting products.
Laszlo Kovacs, the EU tax commissioner, welcomed the initiative but pointed out that all 27 member states would have to agree unanimously to introduce reduced VAT rates on energy-saving goods.
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