[Article] Carbon taxes must not 'prop up' Exchequer - FG

Victor

Should such taxes be on a pure per kW/Hr basis or should it be CO2 per kW/Hr basis?

Carbon taxes must not 'prop up' Exchequer - FG
From:ireland.com
Tuesday, 22nd July, 2003

Plans by the Government to introduce a range of carbon taxes to curb pollution should not be used to prop up the Exchequer's ailing finances, Fine Gael has said.

Newspaper reports this morning said a Cabinet meeting tomorrow will hear that the Department of Finance is seeking approval for a range of such energy taxes.

Levies on fossil fuels will hit business and the general public, leading to a rise in electricity charges, petrol and the cost of oil for home use and manufacturing.

This morning's report said the ESRI estimated such taxes could cost every household €250 a year and raise €860 million for the Exchequer.

Fine Gael environment spokesman Mr Bernard Allen said the proposals for carbon taxes should not be used to "prop up" the Fianna Fail/PD Government's "ailing finances on top of the dirty dozen stealth taxes imposed since the general election.

"It is vital that carbon taxes, if introduced for environmental reasons, and not crude financial reasons, must be imposed with a well-worked out strategy to deliver changes in behaviour of people and businesses," Mr Allen said.

He called on the Government to "ring-fence" the revenue from carbon taxes for energy-saving purposes and to improve emissions and to set the rate of the taxes at a level that does not put Ireland at a significant disadvantage to other countries.

Ireland faces millions of euro in fines if it fails to reduce greenhouse gas emissions under the Kyoto Agreement. Our emissions are limited to an increase of just 13 per cent by 2012 - but have already risen by 31 per cent.

Victor

Obviously they don't know how to do revenue-neutral taxation :rolleyes:

http://home.eircom.net/content/irelandcom/topstories/1090488?view=Eircomnet

Cabinet is split over plans to bring in carbon tax
From:ireland.com
Friday, 25th July, 2003

The Cabinet is split over the proposed introduction of carbon taxes amid concerns it will damage the economy, writes Liam Reid.

Proposals by the Minister for the Environment, Mr Cullen, for significant levels of green taxes on fossil fuels have met resistance from the Minister for Finance, Mr McCreevy, and other Government colleagues

They are concerned that a high carbon tax could damage the competitiveness of Irish industry and lead to a public backlash.

At Wednesday's Cabinet meeting, Ministers agreed to start a formal consultation process on the introduction of carbon taxes, which Mr McCreevy has agreed to in principle. In December's budget he said he intended to introduce carbon taxes from the end of 2004.

According to a Cabinet source, attempts to find a consensus between Ministers and social partners on the tax have proved fruitless to date, and the consultation process is an attempt to find common ground.

"There's a bit of concern about a public and industry backlash on the taxes," said the source.

"There's quite a bit of confusion on the issue in general, so the consultation process was seen as the best way to gauge opinion and get some form of consensus.

"The Minister for Finance knows the taxes have to be introduced sooner or later, and he'll have to make tough decisions on it, but the consultation process pushes it down the road a bit."

Mr Cullen, however, is adamant that carbon taxes are a vital tool in his bid to reduce Ireland's greenhouse gas emissions.

He has warned Mr McCreevy and other colleagues that Ireland will face fines and levies of up to €4 billion if it fails to meet its commitments under the Kyoto Protocol.

Under the agreement Ireland is legally committed to greenhouse gas emissions of no higher than 13 per cent above 1990 levels.

By 2001 emissions were at 31 per cent above 1990 levels, and were the fifth highest in the world on a per capita basis.

Mr Cullen has proposed a carbon tax level of a minimum of €7.50 per tonne of greenhouse gases across the board on all fossil fuels, rising to €20 over a four-year period. Last year his officials made a detailed submission to the Government's tax strategy group on the phased introduction of the €20 tax.

Mr Cullen is still pressing for the tax to be introduced in this way, claiming the effect on industrial competitiveness would be minimal.

However, Mr McCreevy has been warned by industry and by officials within his Department that proposals put forward by the Department of the Environment could damage competitiveness.

His concerns about the effect on the economy last year saw him going against a recommendation from the Tax Strategy Group that a carbon tax be introduced this year.

Mr McCreevy's concerns are shared by the Tánaiste, Ms Harney. Her Department vehemently opposed the Department of the Environment's proposals to the Tax Strategy Group last year, and it is understood this opposition has not changed.

She has asked that carbon tax levels be brought in at a low rate, with an advance warning of two years before they are introduced.

Yesterday Mr Cullen refused to be drawn on the divisions within Government on how to proceed with the tax.

However, he reiterated his belief that the taxes, when introduced, would not damage the competitiveness of the economy.

"My view is that we can decouple [energy taxes and economic growth] going forward," he said. Industry, however, would "have to bear some of the pain" in relation to the taxes.

Mr Cullen made his comments at the publication of a report by the Environmental Protection Agency, which predicts more extreme weather conditions in Ireland because of global warming.

The research predicts that winter rainfall in this country will increase by 10 per cent, but summers will be significantly hotter and drier in the south and east of the country.

Victor

Hmm I wonder what the effects of the following will be.

The previous closures of Ipsat Irish Steel and IFI. Both were very high energy users. Ipsat using electricity to melt steel and IFI extracting the hydrogen from methane (natural gas).

Currently we unofficially re-export a lot of vehicle fuels to the UK - across the border and with hauliers fueling vehicles here for use in the UK (often as far away as Scotland). Raising fuel prices to (near) UK levels would disincentivise this. Thsi would be an instance of increased taxes reducing tax income.

Carbon taxes must not hurt industry, says Harney
From:ireland.com
Saturday, 26th July, 2003

Carbon energy taxes will have to be introduced, but not in a way that will damage industry's ability to compete internationally, the Tánaiste and Minister for Enterprise, Trade and Employment has said.

"I am concerned about anything that can drive up the costs for industry and make us less competitive and put jobs at risk.

"My priority is to maintain as many jobs as possible in Ireland," Ms Harney, speaking in Dublin, said.

The Minister for the Environment, Mr Cullen, wants to introduce extra energy taxes from the end of 2004 in an effort to cut Ireland's carbon-dioxide emissions, as required by commitments made under the Kyoto Agreement.

Under the deal, Ireland's emissions by 2010 must be no more than 13 per cent higher than in 1990. In 2001, however, they were 31 per cent above permitted levels, the fifth-highest in the world on a per-capita basis.

Acknowledging that Ireland must meet its international obligations, the Tánaiste said they must be met "in a way that does not jeopardise Irish business and Irish jobs. And I believe that we can do that if we are sensible."

The consultation paper expected shortly from the Minister for Finance, Mr McCreevy, would allow the Government the opportunity to hear the views of industry, environmental organisations and others, she said.

Companies using large amounts of energy would be vulnerable if this was not done in the appropriate way. "We have already said that we will have to use a carbon tax in order to achieve our objectives under Kyoto," she said.

"But it is the manner of how we do it, the level," she said, adding that it would not be acceptable to force companies involved in emissions trading - where Irish emissions are traded for cuts in developing countries - to pay such a carbon tax.

Companies would have to be given lengthy notice about the level of any such taxes. "All of this would allow companies to plan to ensure that they don't get any sudden shock that could put the company in jeopardy," the Minister said.

Playing down suggestions of a Cabinet rift, the Tánaiste said: "A minister wearing an environmental hat, obviously, will always be very anxious to have heavy taxes on energy. A minister with an industry, economic perspective has a different objective.

"Clearly, we would meet our Kyoto objectives in the morning if we closed down all of our energy-using companies. But nobody wants to see that happen. Certainly the Government doesn't want to see that happen.

"So I think we have to be practical and sensible.

"We have to meet our objectives in a way that bears in mind the need to be competitive and to maintain jobs in Ireland and not send Irish jobs to other locations where the Kyoto requirements would be implemented in a very different way.

"I am very environmentally conscious, too. You can have jobs. You can have a clean environment. And you can have both. It isn't a question of choosing one, or the other. It is all a question of how you do it," she said.

Last night the Department of the Environment insisted that Mr Cullen is not intending to propose any measure that would hamper business. "He is a very pro-enterprise minister. But everybody recognises that we have to do something," said a source.

Meanwhile, the Irish Business and Employers' Confederation warned that recent European Union climate-change decisions will cost the 40 biggest companies in Ireland €200 million a year, rising to €600 million in exceptional circumstances.

Using emissions trading, Ireland and Irish companies could reduce any Kyoto bill by paying for investments in the developing world that would cut emissions from less-efficient industries.

"A tonne of CO2 from there is the same as a tonne from here," said Mr Donal Buckley of IBEC.

Capt'n Midnight

supposedly 7% of our elcetricity needs..... - that's a lot of KWhr's

They could try the uk trick of reducing tax on diesel.
Maybe we could get bio-diesel (Ok it takes a litre of real diesel for farm machinery / refining / transport / drying to make a liter of bio-diesel - but someone else might pay the tax)

sceptre

No news on shutting Moneypoint then?

ednwireland

Another revenue generation exercise how about eliminating vat as well on insulation materials, energy efficient light bulbs, alternative energy equipment for the home, in would at least show some strategy not just another tax.
i love gas but i don't think i'l ever get miles outside a town in donegal and 15 euro a fill aint gonna make me change my energy use.

Victor

Originally posted by sceptre
No news on shutting Moneypoint then?

The problem with shutting money point is we immediatly become entirely dependant on (other people's) natural gas.

bonkey

Originally posted by sceptre
No news on shutting Moneypoint then?

Why would anyone want to do that?

Moneypoint provides a massive percentage of our total power output....and lets not forget that ESB rents two (or three) "portable" gas turbines to meet the existing winter shortages.

Not only that, but as it is the most-recently-built of the thermal stations, it is also one of the more efficient, both in terms of power generated and emissions released per tonne of fuel.

jc

Victor

Originally posted by bonkey
Moneypoint provides a massive percentage of our total power output....

Yes, perhaps 25%, it is rated at 915MW (900 coal, 15 wind).

Originally posted by bonkey
and lets not forget that ESB rents two (or three) "portable" gas turbines to meet the existing winter shortages.

These probably won't be needed in 2-3 years time.

Originally posted by bonkey
Not only that, but as it is the most-recently-built

It's now about 20 years old. There is a lot of much newer capacity - Poolbeg C(?), Statoil, Blanchardstown.

Originally posted by bonkey
it is also one of the more efficient, both in terms of power generated

Probably not, coal needs a lot more handling than gas and oil. Moneypoint doesn't have a local fresh water source (for cooling), local fuel, nor local demand. Coal acheives a lower conversion efficiency than coal and gas. This means more CO2/MWH.

Originally posted by bonkey
emissions released per tonne of fuel.

Moneypoint doesn't have full "scrubbers", so you will find it is higher in CO2, SO2 and soot than natural gas.

The only thing saving Moneypoint (at the moment) is closing it would make us too dependant on natural gas.

bonkey

Originally posted by Victor
Moneypoint doesn't have a local water source (for cooling),

The Shannon isn't a local water source? Its built on the mouth of the damned thing, and unless I'm very much mistaken uses it for its cooling system.

Moneypoint doesn't have full "scrubbers",

The reason being that when it was being constructed, it was determined (rightly or wrongly) that the scrubbers would have a net additive effect to what were considered the harmful emissions of the day.

I don't know if a case was ever made to retrofit the station, as I assume the technology has progressed, and the range of emssions considered harmful has definitely broadened in nature.

The only thing saving Moneypoint (at the moment) is closing it would make us too dependant on natural gas.

The only thing saving it may be that we still have barely enough energy generation capacity in winter. This - as you say - will change in the next few years, but until ESB can get rid of the horrendously expensive portable generators they are leasing, and have a generation capacity with say 30% excess will they be able to consider shutting the station down...Thats more than 2 or 3 years down the line. I'd say more like 10...which would be putting Moneypoint close to its original estimated lifespan of 35 years. Even then, oil-fired systems are more likely to go first, and possibly peat-fired as well, before Moneypoint will be shut down. Perhaps not....maybe they will get rid of it sooner. God knows its no bright spot on the landscape.

Here's a thought though....given that they once joked that Moneypoint brought parts of West Clare from the 18th to the 19th century....what happens when it eventually does close? I guess a downside of building something so large somewhere so remote will be the devestating backlash in public opinion I suspect ESB will suffer unless it manages to find something positive to replace the station with.

jc

Victor

Originally posted by bonkey
The Shannon isn't a local water source? Its built on the mouth of the damned thing, and unless I'm very much mistaken uses it for its cooling system.

Sorry I corrected that - you need fresh water to use for cooling, otherwise the salt just clogs up everything. In Poolbeg, they are now using water from the sewerage treatment plant.

bonkey

Yeah, I saw the cooling bit...which is why I said that it uses estuary water for cooling.

It even says so in : http://www.esbi.ie/pdf/21Moneypoint.pdf which was the first hit off a google search on "moneypoint cooling".

Is this out of date?

Either way...lets not get carried away....its a small side-isue.

jc

Victor

It means they have to treat salf water, instead of just stragiht-forward filtering of fresh water.

I also see they are converting for possible oil use.