Hiking Carbon Tax Won’t Save The Planet

25 Mar 2019 | 09.58 am

Hiking Carbon Tax Won’t Save The Planet

Cows are a bigger problem than cars

25 Mar 2019 | 09.58 am

The government is intent on slamming motorists with Carbon Tax hikes. Meanwhile cattle farmers are left alone and GHG emissions outside Ireland and the EU are set to soar anyway.

 

Whether Groupthink about man-made global warming turns out to be nonsense in future decades is immaterial as far as the European Union and the Irish government is concerned. The EU is most definitely in the ‘something must be done’ camp to reduce greenhouse gas emissions, and member states have no option but to follow Brussels’ diktats on the issue.

At the 2015 Paris climate change assembly, the EU pledged National Determined Contributions on behalf of all the bloc’s members. This commits to a 40% reduction in EU-wide emissions by 2030 compared to 1990. This 40% target comprises a 43% reduction in emissions from the EU Emissions Trading System (ETS) and a 30% reduction in emissions from other sectors compared to 2005 levels.

The European Commission’s Effort Sharing Regulation introduced in 2016 sets out binding annual greenhouse gas emission targets for the period 2021–2030. These targets cover transport, buildings, agriculture and waste management, which account for almost 60% of total EU emissions.

ESR targets are based on GDP per capita and the cost effectiveness of domestic emissions reductions. The ESR mandates a GHG emissions reduction target for Ireland of 30% by 2030, and at the moment Ireland is way behind the curve.

On current trends, the government forecast is that emissions in 2030 will be 4% higher than today. Even with a scenario billed as ‘With Additional Measures’, the predicted decrease by 2030 is just 1%.

GHG emissions are estimated annually by the Environmental Protection Agency. Its latest data, published in December 2018, relates to 2017 and estimated a year-on-year emissions decline of 0.9%. The EPA stated that the reduction should have been 5% if Ireland is to meet its near-term 2020 target, and attributed the sub-1% decline to less domestic heating in 2017 due to warmer weather.

Massive Subsidies

Progress in reducing Ireland GHG emissions has been most evident in the energy generation sector, with a decline of 6.9% estimated in 2017. This is due to the focus over the past decade in developing renewable energy in Ireland, mostly wind farms.

This has been achieved due to massive subsidies for the green energy sector, paid for by business and domestic consumers through the Public Service Obligation levy. From 2011 to 2018, the PSO levy extracted €1,960m from electricity consumers in Ireland, with 60% of that cost absorbed by the business sector.

On the EPA scorecard, transport emissions declined by 2.4% in 2017. The main policy lever to decrease transport emissions is the Carbon Tax, a levy on motor and heating fuels, kerosene and solid fuel. The idea is that by adding yet another tax to the cost of petrol and diesel, motorists will either drive less or seek out more fuel-efficient vehicles.

That’s fine for prosperous city dwellers, but not so good for less well-off people who live in rural communities and can only afford older cars. In the eight years 2011 to 2018, the Carbon Tax added €3 billion to the cost of fuels for motorists in Ireland.

Finance minister Paschal Donohue has signalled that the government is intent on ratcheting up this tax burden in the years ahead. In the name of combating climate change, individuals who can’t afford new cars and who depend on their car to get to work will be required to pay up the most.

When they tried this in France last year, the gillets jaunes protests and riots were the result. Ministers in Ireland are discussing how to avoid this outcome, and debating whether some welfare benefits should rise in tandem with the Carbon Tax.

Dairy Herd Emissions

What will surely annoy those motorists who cop on to what’s going on is that Ireland’s progress in reducing transport emissions is being negated by the increase in emissions from the agriculture sector. Due to the expansion in the dairy herd, the EPA estimates that agriculture GHG emissions increased by 570,000 tonnes through 2017 compared with a decrease of 290,000 tonnes for transport.

At 33% of total emissions, agriculture is by far Ireland’s largest GHG ‘polluter’ – transport is 20% and energy generation is 19%. Nobody in government has yet proposed a green-related cow tax, and none is likely either. The sector is viewed as of fundamental strategic importance to Ireland, and for all their outspoken green credentials, Fine Gael and Fianna Fáil would never dare to give the farming sector a tax shove with a Carbon Tax.

In the absence of curbing output of cow manure, other sectors will face increasing pain. The motor trade is especially in the firing line, with current government policy dictating that only new cars with zero emissions will be permitted to be sold after 2030. Post 2045, it will be illegal to drive a non-zero emission car on Irish roads.

In the government’s optimistic scenario, there will be at least 500,000 electric vehicles on the roads by 2030. Though that objective might seem laughable given the current range of EV batteries and the paucity of charging points, the policy is very real. The implications are hugely disruptive for everybody who drives a car, and the businesses centred on vehicle sales and maintenance.

James McCarthy, CEO of Nissan Ireland, has a better idea. He has suggested banning  imports of UK cars registered prior to 2014. “The government cannot solve the carbon emissions problem when 100 polluting cars are being put onto Irish roads for every zero emissions EV sold,” says McCarthy. “1,230 new EVs were sold in Ireland in 2018 while we imported 100,770 polluting cars from the UK. That is a sobering statistic.”

This disruption to motorists and the motor trade is being sold to the public on the basis that there is no choice if the planet is to be saved. The reality is that if even if everyone in Ireland is confined to walking and cycling in 2030, worldwide GHG emissions will still be much larger than they are today.

Double Standard

A crucial aspect about the UN Intergovernmental Panel on Climate Change is that it divides the world into two camps: countries that initiated the Industrial Revolution and have been chugging GHGs into the atmosphere since the 19th century (broadly Europe and North America), and the rest. Under the IPCC framework, the onus is on the early GHG polluters to cut their emissions, while the rest are allowed leeway because in theory they’re still playing economic catch-up.

In contrast to the European Union, under international climate change agreements most countries in the world are merely committed to reducing emissions compared to a ‘Business As Usual’ trajectory. For example, Turkey has projected that under a BAU scenario, its annual GHG emissions would total 1,175 million tonnes of CO2 equivalent in 2030. Turkey has pledged to the UN to implement ‘low-carbon development pathways’ to reduce that 2030 outcome to 930 million tonnes per annum.

That outcome would still mean Turkey’s annual GHG emissions will have increased by 400 million tonnes of carbon dioxide equivalent in a decade’s time. If Ireland sucks up all the government’s tax pain and reduces emissions by 30% by 2030, the annual ‘saving’ will be 18 million tonnes. We can clap ourselves on the back all we like, but in terms of saving the planet Ireland’s GHG emissions reduction is a token gesture.

That’s something that motorists may reflect on in the coming years as the government increases the Carbon Tax to raise the cost of fuel by 25%.

 

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