You are currently browsing the category archive for the ‘Competitiveness issues’ category.
THE VICTORIA TIMES COLONIST – 29/07/2010
Amidst increasingly limited prospects for government action on climate change, this article highlights the unique success of British Columbia’s climate policy path since its introduction of North America’s first carbon tax shift. Though initially met by a host of concerns relating to business competitiveness and potentially adverse distributional impacts, a preliminary assessment of the tax two years’ on suggests it seems to be working. The tax puts a price on carbon emissions and then returns the revenues as tax cuts for individuals and businesses. Initial results indicate that B.C’s economic growth in 2009 – the first full year with the tax in effect – was higher than Canada’s national rate, and that unemployment rates are below the national average and did not increase following implementation of the tax. During 2008 and 2009, the tax raised $846 million. The value of the offsetting cuts was nearly $1.1 billion over these two years, such that the net tax reduction for tax payers was approximately $230. While the economic effects have been negligible, the environmental impacts are anticipated to be positive, but it is too early to determine the greenhouse gas reduction as yet, in part because Canada has not yet released carbon emissions data for 2009 and in part because the tax is still relatively low. There are however many examples illustrating that people have used less oil, gas and coal as the prices have risen. Read the article…
THE TELEGRAPH – 10/08/2010
This article highlights the announcement made by the Coalition Government that fines will be imposed on companies that fail to register their energy use by 30th September. Those that do participate in the Carbon Reduction Commitment (CRC) scheme by declaring their energy use will also be charged for every ton of greenhouse gas produced. The CRC was introduced with the aim of creating a financial incentive to cut energy use, giving bonuses to organisations that achieve the biggest reductions, funded by the penalties imposed on those with the worst record. Surveys have indicated limited awareness amongst many businesses that they should be taking part in the scheme, or even of its existence. Many business leaders are opposed to the scheme, denoting it as complex and bureaucratic. WSP Energy & Environment consultancy has predicted that approximately 7,500 businesses are likely to miss the September deadline. Read the article and a related article…
A subsequent article highlights an analysis by PricewaterhouseCooper indicating that companies will need to have completed the paper work for participating in the scheme by 2nd September in order to allow for the necessary checks in time for the deadline.
THE INDEPENDENT – 25/06/2010
The mining industry in Australia is using the change of Prime Minister in Australia as an opportunity to reassert its case for the scrapping of the Resources Super Profits Tax (the ‘Henry Tax’). This tax was originally proposed to ensure that Australians got a fair deal from the profits made by mining companies, but has been deeply unpopular with the mining community, who fear it could jeopardise investment. There is uncertainty amongst industry analysts as to whether the change of leadership will see the end of the tax but there is a feeling that it could extend the period of uncertainty for the sector. Read the article…
MONTREAL GAZETTE – 29/06/2010
Harvard Professor, Michael Porter, has called for a carbon tax in Canada, denoting the US cap-and-trade model as too complicated and arguing that it blunts incentives that would enhance innovation and competitiveness. He suggests that a carbon tax would, in contrast, be highly visible, transparent and fair and therefore much more likely to trigger innovation. He highlights that ‘even if you don’t believe in climate change, we do understand the fundamental importance of energy and energy costs… a carbon tax would lead to a rethinking of energy use, drive innovation in the green economy and yield profits for ‘first movers’’. Read the article…
BUSINESS GREEN – 21/06/2010
This article reports on the findings of a large-scale survey of business leaders undertaken by PricewaterhouseCoopers (PwC), indicating that 94% of British firms expect climate policy to affect their operations within the next three years. Over two thirds of the respondents would like the government to tackle climate change through policy, regulations and taxation. A similar number felt that current environmental policy is too ambiguous, and just 18% perceived there to be joined-up thinking between the UK government departments, bodies and agencies relating to climate change. 80% respondents supported green tax charges and 64% were specifically in favour of a carbon tax. Read the article…
Similarly, an article in the Guardian highlights criticisms by Britain’s manufacturs’ organisation EEF that denote the government’s climate change policy as ‘chaotic, overcrowded and complicated’ and call for an economy-wide carbon tax. The EEF argue that a new single levy based on energy usage to replace the existing mix of climate measures would simplify the system and thereby facilitate business budgeting and encourage a shift towards cleaner energy.
THE ECONOMIST – 17/06/2010
This article highlights the frequently raised concerns about the impact of a carbon tax on business competitiveness and the economy, and suggests such a tax may not help to address issues of energy security and supply. It does also, however, emphasise the benefits of a carbon tax. Not only would it be simpler and more predictable than the existing system of tax breaks, trading schemes and purchasing obligations, but it would also provide businesses with the assurance they are seeking to encourage investments in greener technologies. Read the article…
IRISH TIMES – 01/05/2010
The Irish carbon tax on domestic heating oil has been implemented, applying to kerosene, natural gas, marked gas oil, liquid petroleum gas and fuel oil. Despite criticisms from business, farming groups and groups campaigning for the elderly, the Irish Government has defended the tax arguing that the revenues raised would be used to reduce taxes in other areas. It is proposed that €40 million will be spent on insulating social housing this year, and a further €90 million allocated to the national home retrofit programme. Read the article…
THE TELEGRAPH – 31/12/09
The French constitutional court has ruled that there are too many exemptions for polluters in Sarkozy’s current carbon tax plan. The legal compliance watchdog said 93% of industrial emissions, other than fuel use, would be exempt from the tax, which undermines the goal of fighting climate change. It would also have placed most of the burden on households through transport and heating fuels. Read the article and the French press release…
An article in ENDS Europe Daily has highlighted industry reactions to the government’s plans to revise the carbon tax proposal to take into account the court’s ruling. France’s oil industry association, UFIP, has warned that the proposed carbon tax in France would have ‘disastrous’ impacts on industrial installations if applied, whilst the Employers’ association, Medef, has also raised competitiveness concerns. Medef has said that applying the proposed tax to ETS installations would amount to double taxation.
THE IRISH TIMES – 02/12/09
The Irish government has committed itself to a carbon tax in the 2010 budget, which will likely add about four cents to the price of a litre of petrol. Professor Paul Ekins has highlighted the competitiveness risks associated with introducing such a tax simply as a new revenue stream rather than ensuring it is revenue-neutral. He emphasises that environmental tax reforms have to have ‘as their primary aim’ the goal of reducing greenhouse gas emissions, not of making economies more efficient. A spokesperson for the Irish Minister of the Environment, John Gormley, said it was intended that the money raised by the proposed tax would be ‘ring-fenced’ for funding environmental measures elsewhere, as was the case with the plastic bag and landfill levies. He said that the tax, which would also affect home heating, oil, coal and turf, would bring mitigating measures for those on social welfare or low incomes. Chief Executive of the Chartered Institute of Logistics and Transport, Colm Holmes, has called for a ‘more sophisticated form of carbon tax’, e.g. one based on the necessity for vehicle usage. Read the article…
THE ECONOMIST – 19/11/09
This article discusses the suggestion that manufacturers in countries with tighter carbon emissions limits and carbon reduction policies will face added costs which foreign competitors do not, and the argument that this may cause them to relocate some of their production to ‘carbon havens’ where the cost of polluting is lower. It highlights, however, a new study by economists at the World Bank and the Peterson Institute for International Economics which finds that although some production would migrate, the net increase in emissions in poor countries would be small. The article discusses suggestions for carbon-based tax adjustments on exports from countries that benefit from low carbon prices, but fears these would have adverse implications for trade, particularly for developing countries. Read the article…
Editor
Ben Shaw
Paul Ekins
Simon Dresner
benwatsonpsi
