Reforming the EU’s Own Resources and Climate Tax: A Path to Fiscal Stability and Enviromental Responsibility

The European Union faces the challenge of ensuring its future budgetary stability, which relates to tendences to find new sources of budgetary revenues. From the perspective of EU objectives in sustainable development, it seems to be necessary to reflect an increasingly significant need to secure support and funding for environmental goals. In this regard, the EU continues to expand its commitments to fiscal and environmental responsibility. It is becoming significantly clearer that existing instruments such as the Emissions Trading Scheme (ETS) and the Carbon Border Adjustment Mechanism (CBAM) are limited and that they cannot contribute to genuine EU Own Resource significantly. This paper examines how the EU might, from the legal perspective, enact new Own Resources to support its efforts in addressing climate change and promoting ecological and fiscal sustainability, and secure new funding of the EU budget and make a pathway to completely new genuine Own Resources. Further, the paper focuses on the question, which new Own Resources are compatible with the EU legal framework, what legal mechanisms under the Treaties, and Own Resources Decision are relevant, or if in this sense the institute of enhanced cooperation can be used. The paper further analyses the several detailed research questions, including the potential scope of the Own Resources Decision in relation to the harmonization of member states’ tax legislation, particularly whether it is bound by the principle of conferral. The project also explores the nature of parliamentary action required across the 27 EU Member States, and whether a climate tax could be introduced based on enhanced cooperation among a group of 9+ like-minded countries. A well-structured climate tax could strengthen the EU budget, ensuring long-term fiscal sustainability while supporting the Union’s environmental objectives. However, successful implementation requires comprehensive coordination between member states.