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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…
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…
BUSINESS GREEN – 01/06/2010
Draft documents seen by Reuters suggest that the European Commission may be due to propose significant changes to energy taxation policy, revolving around a single pan-European energy tax system. It is suggested that a minimum level of taxation would be imposed for energy sources ranging from coal to biofuels to renewables, the value of which would be based on the energy content and carbon footprint of the fuels. It is hoped such a measure would create new incentives for investment in low carbon energy sources. Also included in the draft documents are plans to ensure that carbon intensive industries are protected, and that support is provided to vulnerable households to minimise the risk of adverse distributional impacts. Read the article…
THE BBC – 11/05/2010
A group of 14 academics from Europe, North America and Japan have produced a report, the Hartwell Paper, arguing that climate change can best be ameliorated by pursuing ‘politically attractive and relentlessly pragmatic options that also curb emissions’. They highlight that the failure of the UN process and the ‘ClimateGate’ issue necessitate a significant reframing of the climate change issue. One of the authors, Mike Hulme, writes ‘climate change has been represented as a conventional environmental ‘problem’ that is capable of being ‘solved’. It is neither of these. Yet this framing has locked the world into the rigid agenda that brought us to the dead end of Kyoto, with no evidence of any discernable acceleration of decarbonisation whatsoever’. The group advocate an initial focus on short-term fixes for greenhouse gases or other warming agents, such as black carbon, followed by the implementation of a hypothecated carbon tax in developed economies to fund the research, development and roll-out of low carbon energy technologies. Meanwhile, rather than providing new climate adaptation funds to developing countries, all developed countries should be bound to meet the internationally agreed target of contributing 0.7% of their GDP to overseas aid.
Others, such as the German Potsdam Institute for Climate Impact Research, however, argue that ‘the paper’s focus away from CO2 is misguided, short-sighted and probably wrong’.
Read the article…
THE GUARDIAN – 01/01/2010
This article highlights Lord Adair Turner’s recommendation that the government should embark on a tax and spend programme to green the economy and create jobs. ‘If we have to raise taxes – and we will to some extent – we can deliberately design those to tax bad environmental things, like overuse of fossil fuels, rather than good welfare-enhancing things, like employment for people’, says Turner. He also said that spending needs to be more carefully targeted rather than cut sharply e.g. on investments such as insulating peoples’ homes and thereby also employing people from the construction industry, which has particularly hit by the recession. Read the article…
THE ECONOMIST – 03/12/09
This article discusses the negotiations that need to happen in Copenhagen and, in particular, emphasises that reaching an international agreement at Copenhagen is only the first step to emissions cuts. It highlights that national targets need to be implemented through domestic policies which encourage businesses to invest in clean products and processes, and discourage them from investing in carbon-intensive products and processes. The article suggests that a good policy framework would include some regulation in areas where the market doesn’t work well, a degree of subsidy for research into technologies that are still far from marketable (e.g. carbon capture and storage), but that it would need to rely largely on putting a price on carbon in order to send a clear signal to business. Read the article…
Another article (http://www.economist.com/research/articlesBySubject/displayStory.cfm?story_id=14994818&subjectID=348924&fsrc=nwl) explores the advantages and disadvantages of regulation, carbon-pricing and subsidies in more detail, highlighting that governments generally like regulation, economists like carbon prices (when set at the right level), and business like subsidies.
THE TELEGRAPH – 02/12/09
This article highlights Lord Stern’s recent report findings that it is still possible for the world to keep global temperature rise below 2˚C but only if world leaders agree to significant cuts in global emissions at next week’s UN Climate Summit in Copenhagen. The report emphasises that the world must be prepared to spend money on tackling climate change through both public finance and a new raft of carbon taxes. Stern suggests the European Union should agree to cut emissions by 30% by 2020 and that the UK should cut greenhouse gas emissions by more than 40% over the same period, through: the decarbonisation of electricity by switching to nuclear or renewables, replacing petrol cars with electric vehicles, and insulating more homes. He has also advocated individuals to ‘do their bit’ by eating less meat, flying less and recycling more. Wealthier nations will be required to assist less developed countries in switching from dirty coal-fired power stations to new technologies like wind and solar, and poorer countries will need finances to adapt to the effects of climate change, including flooding and droughts. Read the article…
BUSINESS GREEN – 23/11/09
Shadow secretary of state for international development, Andrew Mitchell, has promised to stop the subsidies currently being paid to fossil-fuel burning power stations through the Expert Credit Guarantee Department (ECGD). The ECGD provides insurance and bank loan guarantees to British firms exporting technologies and services overseas. A recent National Audit Office report suggests the department has not rejected any applications for support on environmental grounds since 2000. Mitchell suggested that the ECGD should be seeking to champion only those British companies that develop and export clean technologies, with guarantees from the department used to catalyse private sector investment and to enable the effective transfer of low carbon technologies to developing countries. Read the article…
DELOITTE INSIGHT – 07/09/09
This article highlights the various forms of eco-tax that have been introduced and/or proposed across the globe. Mentioned are Taiwan’s plans for an energy and environment tax to be implemented in 2011; plastic bag taxes in Hong Kong and Ireland; Japan’s removal of duties on biofuel and lowering of taxes on cars with low emissions; China’s taxes on energy consumption and tax incentives for companies which reduce water consumption; Sweden’s waste taxation; Norway’s taxation of certain products which contain fluorine; and the UK’s doubling of its air passenger duty in 2007. The article highlights the benefits of environmental taxation in modifying behaviour, raising revenue, and incorporating the costs of environmental damage into the prices of goods and services. It also, however, raises the drawbacks including evasion measures (such as illegal landfills and illegal sales of fuel) and the distributional issues. Read the article…
A follow-up article focuses more specifically on the potential for environmental taxes in Malaysia…
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