Proposed Carbon Tax increase

rayh

Will electricity be subject to proposed Carbon tax increase?

Victor

rayh wrote: »

Will electricity be subject to proposed Carbon tax increase?

Not directly. It would be the base fuels that would be subject to any increase. This would have a knock-on impact on electricity prices, depending on the fuel mix used by the supplier and their conversion efficiency.

rayh

Victor wrote: »

Not directly. It would be the base fuels that would be subject to any increase. This would have a knock-on impact on electricity prices, depending on the fuel mix used by the supplier and their conversion efficiency.

How much is included todate?

pumpkinsoup

rayh wrote: »

Will electricity be subject to proposed Carbon tax increase?

No.

Victor wrote: »

Not directly. It would be the base fuels that would be subject to any increase. This would have a knock-on impact on electricity prices, depending on the fuel mix used by the supplier and their conversion efficiency.

A carbon tax has no effect whatsoever on the price of electricity, neither direct nor indirect. Electricity generators have the benefit of participating in the EU Emissions Trading System which exempts them from the payment of an Irish carbon tax on all fuels used.

gullon

What does the government do with the money collected from the carbon tax.

c montgomery

gullon wrote: »

What does the government do with the money collected from the carbon tax.

They pay welfare benefits, inflated public service salaries, pensions, bail out banks and repay our european partners (overloards).

Watch out global warming, irelands on your case!

Macha

c montgomery wrote: »

They pay welfare benefits, inflated public service salaries, pensions, bail out banks and repay our european partners (overloards).

Watch out global warming, irelands on your case!

Please keep the "european partners (overlords)" and other such self-vicitimising myths for the Politics forum

If we want to move our tax base onto more stable sources, we have to include taxes on consumption, including a carbon tax. In that scenario, hypothecation cannot work because the state pays for many things, including social welfare, education and health and any taxes on consumption will have to go towards these spending areas.

gullon

Is the public not already taxed on consumption through excise and duty? Is this a case of double taxation?

Bullseye1

Macha wrote: »

Please keep the "european partners (overlords)" and other such self-vicitimising myths for the Politics forum

If we want to move our tax base onto more stable sources, we have to include taxes on consumption, including a carbon tax. In that scenario, hypothecation cannot work because the state pays for many things, including social welfare, education and health and any taxes on consumption will have to go towards these spending areas.

Can you explain how we are to become more competitive with higher energy costs? And if people are expected to survive on lower wages how does raising energy costs through these 'carbon taxes" help their case. Seems a strange time to start increasing such costs as petrol and diesel when the economy is on its knees. Tackle the real problem, bloated government in all its forms.

Macha

gullon wrote: »

Is the public not already taxed on consumption through excise and duty? Is this a case of double taxation?

Yes but if you haven't noticed, our tax income isn't exactly matching our spending. Hence €50 billion of the money under the EU/IMF programme is to go towards government spending. That is pure madness.

Bullseye1 wrote: »

Can you explain how we are to become more competitive with higher energy costs? And if people are expected to survive on lower wages how does raising energy costs through these 'carbon taxes" help their case. Seems a strange time to start increasing such costs as petrol and diesel when the economy is on its knees. Tackle the real problem, bloated government in all its forms.

There are plenty of other more important factors that impact on competitiveness than energy costs. The most important factor by far is wage costs. Property costs are also a really big deal.

Energy costs do matter, but nowhere near as much as wages and property costs. So I don't buy the idea that a carbon tax will negatively impact on our competitiveness at a time when we have the 2nd highest minimum wage in Europe and still have astronomical property prices compared to Europe.

People have survived through much higher energy costs that had nothing to do with carbon taxes, for example through the rise in energy prices in 2007. In terms of the total cost of energy, carbon tax is a small fraction and the jumping-up-and-down that it attracts is disproportionate to its share in the cost of energy.

And you haven't even considered the basic principle that people pay for the pollution that they cause. If you accept that carbon is a pollutant and the polluter pays principle, then you must accept a form of carbon tax.

Ireland doesn't have a particularly large government in relation to other members of the EU or OECD. We do, however, have high levels of government spending in relation to our tax receipts.

rayh

Macha wrote: »

Yes but if you haven't noticed, our tax income isn't exactly matching our And you haven't even considered the basic principle that people pay for the pollution that they cause. If you accept that carbon is a pollutant and the polluter pays principle, then you must accept a form of carbon tax.

If you accept this factor and you apply a tax which exclude’s an energy source which achieves significant higher emissions per unit of energy and you apply to a depressed economy. I suspect a negative result?

Macha

rayh wrote: »

If you accept this factor and you apply a tax which exclude’s an energy source which achieves significant higher emissions per unit of energy and you apply to a depressed economy. I suspect a negative result?

Yes. Arguably all that a carbon tax does is internalise a cost that is currently externalised to the rest of society. By not applying a carbon tax, we would effectively allow people to do the equivalent of throw rubbish out of their car windows and expect the state, ie the tax payer, to oay for it to be cleaned up.

But if you don't apply the carbon tax correctly, then you will have distortions in the market. This is part of the reason I'm not entirely happy with the increase in the domestic carbon tax because ideally, it should be very close to the EU ETS price to ensure the market can find the most efficient places and ways to reduce carbon emissions.

If you're talking about the PSO levy subsidy of peat, you're absolutely right that it should be stopped.

rayh

Macha wrote: »

But if you don't apply the carbon tax correctly, then you will have distortions in the market. This is part of the reason I'm not entirely happy with the increase in the domestic carbon tax because ideally, it should be very close to the EU ETS price to ensure the market can find the most efficient places and ways to reduce carbon emissions.

Yes but electricity has been seriously distorted in the residential market through its fixed charges, free allocations, convenience of use and its exclusion from carbon tax

Macha

rayh wrote: »

Yes but electricity has been seriously distorted in the residential market through its fixed charges, free allocations, convenience of use and its exclusion from carbon tax

As someone else pointed out above, electricity is subject to a price of carbon and that is through the EU ETS as opposed to Ireland's domestic carbon tax system. I'm not sure what you mean by "convenience of use".

rayh

Macha wrote: »

I'm not sure what you mean by "convenience of use".

At the risk of going off topic – in the past decade the convenience element of this fuel has had a significant influence on the increase in electric energy in the residential sector and from a Fuel Poverty perspective, I see every day incidents of how people have become trapped, like Storage Heating in poorly insulated buildings and the list goes on.

Victor

Macha wrote: »

If you're talking about the PSO levy subsidy of peat, you're absolutely right that it should be stopped.

A slightly different argument. the PSO levy is there for energy security reasons - we are over dependent on oil and especially gas for power generation.

The PSO only kicks in when the price of a barrel drops below about $50/barrel* which it hasn't for several years. The price of gas tends to be linked to the price of oil. Even with the PSO, I assume that all peat does/will pay the carbon tax / credits charge.


* The price at which the energy equivalent from X amount of peat is equal to Y amount of oil or gas.

Macha

rayh wrote: »

At the risk of going off topic – in the past decade the convenience element of this fuel has had a significant influence on the increase in electric energy in the residential sector and from a Fuel Poverty perspective, I see every day incidents of how people have become trapped, like Storage Heating in poorly insulated buildings and the list goes on.

No you're absolutely right - the cheap availability of electricity was a big factor in the poor quality design of industrial systems, agricultural systems, architecture and much more.

I think that fuel poverty payments are necessary even thought they do result in more energy usage that would normally happen. But SEAI do run the Warmer Homes Scheme that aims to improve the energy performance of low income housing:

http://www.seai.ie/Grants/Warmer_Homes_Scheme/

Victor wrote: »

A slightly different argument. the PSO levy is there for energy security reasons - we are over dependent on oil and especially gas for power generation.

The PSO only kicks in when the price of a barrel drops below about $50/barrel* which it hasn't for several years. The price of gas tends to be linked to the price of oil. Even with the PSO, I assume that all peat does/will pay the carbon tax / credits charge.

* The price at which the energy equivalent from X amount of peat is equal to Y amount of oil or gas.

True, the PSO levy is there for energy security but it makes no sense to apply it to peat, one of the most polluting fuels (as well as destructive in terms of habitat) considering our environmental targets.

pumpkinsoup

Macha wrote: »

As someone else pointed out above, electricity is subject to a price of carbon and that is through the EU ETS as opposed to Ireland's domestic carbon tax system.

It's not. The cost of CO2 for electricity plant operators is zero. This is because they've been allocated free credits through the ETS that are in excess of what they use. I agree with rayh that applying a carbon tax to every unit of fossil fuel used in the home while exempting electricity through ETS distorts the energy market, and does so in a way that is not advantageous to the environment.

Macha wrote: »

But if you don't apply the carbon tax correctly, then you will have distortions in the market. This is part of the reason I'm not entirely happy with the increase in the domestic carbon tax because ideally, it should be very close to the EU ETS price to ensure the market can find the most efficient places and ways to reduce carbon emissions.

The EU ETS price that you mention is a marginal price. It's the price that participants pay for emissions that are in excess of their free allocations. Setting carbon tax at the EU ETS marginal price makes no more sense than setting it at any other price. Most / all ETS participants in Ireland currently pay nothing for their CO2 emissions because of their free allocations. Companies that are not in the ETS and all the rest of us pay €15 a tonne, soon to be €30. This is inequitable. If equity was the goal of a carbon tax (which it isn't) it would be set at zero.

Victor wrote: »

The PSO only kicks in when the price of a barrel drops below about $50/barrel* which it hasn't for several years. The price of gas tends to be linked to the price of oil. Even with the PSO, I assume that all peat does/will pay the carbon tax / credits charge.


* The price at which the energy equivalent from X amount of peat is equal to Y amount of oil or gas.

This is completely untrue. The PSO levy is based on a complex model that forecasts the mix of power plants used to satisfy electricity demand and their associated costs. As oil is used for only a small proportion of electricity generated, its price is not relevant to the PSO levy. Also, the PSO levy has been in place for a number of years, with the taxpayer absorbing the cost of the levy. Since October costs have been passed on the domestic consumer.

Macha wrote: »

No you're absolutely right - the cheap availability of electricity was a big factor in the poor quality design of industrial systems, agricultural systems, architecture and much more.

If true then exempting electricity from carbon tax and applying it to some alternative fuels would further promote these practices.

Macha

pumpkinsoup wrote: »

It's not. The cost of CO2 for electricity plant operators is zero. This is because they've been allocated free credits through the ETS that are in excess of what they use. I agree with rayh that applying a carbon tax to every unit of fossil fuel used in the home while exempting electricity through ETS distorts the energy market, and does so in a way that is not advantageous to the environment.

That is what happened in past schemes. There have been issues with over-allocation and the giving away of credits for free based on past emissions.

However, the system was reviewed by the Commission and they have agreed in 2013 to auction the majority of the allowances in 2013. With schemes like these, the devil is in the detail and given that the EU ETS is the first of its kind in the world, it was natural that there would be teething problems.

As for carbon tax vs cap and trade, there are pros and cons on either side. The existence of both within one economy makes the matching of carbon prices tricky.

pumpkinsoup wrote: »

The EU ETS price that you mention is a marginal price. It's the price that participants pay for emissions that are in excess of their free allocations. Setting carbon tax at the EU ETS marginal price makes no more sense than setting it at any other price. Most / all ETS participants in Ireland currently pay nothing for their CO2 emissions because of their free allocations. Companies that are not in the ETS and all the rest of us pay €15 a tonne, soon to be €30. This is inequitable. If equity was the goal of a carbon tax (which it isn't) it would be set at zero.

As above.

pumpkinsoup wrote: »

If true then exempting electricity from carbon tax and applying it to some alternative fuels would further promote these practices.

It's true of the cheap availability of energy in general. Given the relative ease with which we can decarbonise electricity, (ie vs trying to decarbonise transport fuels), the IEA and others have acknowledged that we will be moving towards electric economies where transport and heating will become more and more electrified. In such a scenario, I don't see the benefit of exempting electricity of tax. Plus many of the alternative fuels that you're probably referring to ultimately generate electricity.

encyclopedia

It seems the budget is not going the carbon tax route and taxing fuel the traditional way

rayh

encyclopedia wrote: »

It seems the budget is not going the carbon tax route and taxing fuel the traditional way

Do we know why this change?

Heroditas

rayh wrote: »

Do we know why this change?

Quite possibly the Green Party were afraid they'd bear the brunt of an increase in the Carbon Tax at the polls early next year.
At least if it's a duty increase, they can blame it on FF. If it was a Carbon Tax increase, everyone would blame them.

(just my opinion anyway)

Macha

Heroditas wrote: »

Quite possibly the Green Party were afraid they'd bear the brunt of an increase in the Carbon Tax at the polls early next year.
At least if it's a duty increase, they can blame it on FF. If it was a Carbon Tax increase, everyone would blame them.

(just my opinion anyway)

The carbon tax has remained the same probably because there are issues with having a price on carbon in one section of the economy different from that in another section of the economy, ie under the EU ETS. That and probably any bargaining power the Greens had with FF went out the window when they announced that they would pull out in the New Year.

pumpkinsoup

encyclopedia wrote: »

It seems the budget is not going the carbon tax route and taxing fuel the traditional way

Heroditas wrote: »

Quite possibly the Green Party were afraid they'd bear the brunt of an increase in the Carbon Tax at the polls early next year.
At least if it's a duty increase, they can blame it on FF. If it was a Carbon Tax increase, everyone would blame them.

(just my opinion anyway)

Macha wrote: »

The carbon tax has remained the same probably because there are issues with having a price on carbon in one section of the economy different from that in another section of the economy, ie under the EU ETS. That and probably any bargaining power the Greens had with FF went out the window when they announced that they would pull out in the New Year.

It was already established that there would be no increase in carbon tax in the 2011 budget. I don't understand why anyone would have speculated otherwise. The IMF / ECB have already decreed how and when we will apply increased carbon tax. In the National Recovery Plan published a week before the budget it clearly states that:

"It is proposed that over the period of this Plan the price of carbon will be doubled to €30 per tonne thereby contributing €330 million to the overall correction. This will entail a €10 per tonne increase in 2012 and a further €5 per tonne in 2014."

The size of the increase and the timetable has nothing whatsoever to do with the Greens or emissions trading. It's not even within the gift of the Irish government to change it in my view. The budgets of the next government(s) will be further testament to this.

Macha

Good point - I haven't read up too much on what the EU/IMF have been saying but your post makes sense.

Heroditas

Nothing stopping them increasing it now though, if they want to though!
However, it's expected that the price of carbon will jump up over the next few years anyway so these increases would be in line with those expected jumps.

Oscardela

I have a 3.0 litre motor car. The amount of VRT and VAT I had to pay when I bouight it is anyone's guess, but it cost over €75 000 when I bought it in 2004. Since then the tax & vat on petrol, and adding the Vat on servicing, means the tax I have paid has probably paid for the government jet for about half a year. Then take into account that I'm paying almost €1300 per annum to buy a tax disc for the windscreen, and anyone who thinks we need "carbon taxes" must be blind.

Recently, I was in Germany and the same car there costs less than €200 per annum for a tax disc.

Tax is tax, and to call a tax a "carbon" tax is just semantics and a way for a government to increase taxes and try to make it look good. The day our government doesn't send a minister in a private jet from dublin to donegal to do the equivalent of opening a hair salon, while at the same time sending a mercedes from dublin to donegal to ferry the minister from the plane to the hair salon in donegal, is the day we might start taking lectures from politicians on "carbon" taxes.

Macha

Oscardela wrote: »

Tax is tax, and to call a tax a "carbon" tax is just semantics and a way for a government to increase taxes and try to make it look good. The day our government doesn't send a minister in a private jet from dublin to donegal to do the equivalent of opening a hair salon, while at the same time sending a mercedes from dublin to donegal to ferry the minister from the plane to the hair salon in donegal, is the day we might start taking lectures from politicians on "carbon" taxes.

No, a carbon tax is the internalisation of the cost of carbon that, without a carbon tax, would remain externalised.

Stop fudging the issue with general moans about politicians behaviour. There's enough of that going on in the Politics Forum.

Oscardela

Macha wrote: »

No, a carbon tax is the internalisation of the cost of carbon that, without a carbon tax, would remain externalised.

I wish I knew what "the internalisation of the cost of carbon" and "would remain externalised" mean.

We have been told for years that we don't have a hypothecated tax system. But when it suits the government, we are now told we need to have carbon taxes. There are those who choose to believe that our government is honest about that, just as there will be those who choose to believe that our government is dishonest and it's just semantics.

The real questions are (i) how accurate can the predictions be that in 50 or 100 years time the world will have warmed slightly and (ii) can we alter the likely climate conditions in 50 or 100 years time in any substantial way. The problem with (i) is that we have to wait until 50 or 100 years to find out.

This year, the UK Met Office was predicting a mild winter. As recently as November they have been sticking to that prediction, when even all the school children in the country could have told them they were wrong. It's easy to see now that they are wrong as the winter is here and we can all judge for ourselves. It seems it is impossible for us to predict the likely climate conditions a few months ahead with any accuracy, but we are still expected to believe that we can predict the likely climate in 50 or 100 years time.

Macha

Oscardela wrote: »

I wish I knew what "the internalisation of the cost of carbon" and "would remain externalised" mean.

It means that carbon is a pollutant and as such, there is a cost involved in creating and emitting it. At the moment, that cost is externalised to the rest of society (or taxpayers), ie the individual emitting the carbon doesn't pay the relevant cost. The internalisation of this cost of carbon involves the application of a carbon tax so that each individual or body pays for what they emit.

Oscardela wrote: »

We have been told for years that we don't have a hypothecated tax system. But when it suits the government, we are now told we need to have carbon taxes. There are those who choose to believe that our government is honest about that, just as there will be those who choose to believe that our government is dishonest and it's just semantics.

This paragraph suggests you don't know what hypothecation is. We largely don't have hypothecation in this country. There are a few exceptions like the plastic bag levy. I'm not sure where you get the idea that no hypothecation goes on.

Oscardela wrote: »

The real questions are (i) how accurate can the predictions be that in 50 or 100 years time the world will have warmed slightly and (ii) can we alter the likely climate conditions in 50 or 100 years time in any substantial way. The problem with (i) is that we have to wait until 50 or 100 years to find out.

This year, the UK Met Office was predicting a mild winter. As recently as November they have been sticking to that prediction, when even all the school children in the country could have told them they were wrong. It's easy to see now that they are wrong as the winter is here and we can all judge for ourselves. It seems it is impossible for us to predict the likely climate conditions a few months ahead with any accuracy, but we are still expected to believe that we can predict the likely climate in 50 or 100 years time.

This is not turning into a thread on the climate change "debate". We have enough other threads for that.

Oscardela

Macha wrote: »

This paragraph suggests you don't know what hypothecation is. We largely don't have hypothecation in this country. There are a few exceptions like the plastic bag levy. I'm not sure where you get the idea that no hypothecation goes on.

To clear up any misunderstanding, what I mean by hypothecation is to allocate the revenue raised by a tax for a specified purpose.

Macha wrote: »

It means that carbon is a pollutant and as such, there is a cost involved in creating and emitting it. At the moment, that cost is externalised to the rest of society (or taxpayers), ie the individual emitting the carbon doesn't pay the relevant cost. The internalisation of this cost of carbon involves the application of a carbon tax so that each individual or body pays for what they emit.
]

Why does it matter who "pays" for it? What good does "paying" for it do, apart from just raising more taxation for governments?

If you only want to discuss issues such as "paying" for carbon used, and avoid the bigger questions about why it should be "paid" for and whether or not the reasons behind "paying" for carbon is legitimate. then I suppose that more or less brings this discussion here to a close, as I question the basis on which these taxes are levied. As you appear to forbid discussion of that here, then that appears to being this conversation to an end.

Macha

Oscardela wrote: »

To clear up any misunderstanding, what I mean by hypothecation is to allocate the revenue raised by a tax for a specified purpose.

Well then your paragraph really doesn't make any sense given the facts.

Oscardela wrote: »

Why does it matter who "pays" for it? What good does "paying" for it do, apart from just raising more taxation for governments?

Because there is a cost associated with emitting carbon. And there are three main reasons for a carbon tax:
1) The "polluter pays" principle: the person who pollutes (ie in this case emit carbon) should pay for what they emit, as opposed to leaving it up to the rest of society to pick up the tab
2) The contribution from the carbon tax can go towards mitigation, pollution-reducing measures or dealing with the actual costs of the pollution.
3) The tax incentivises people to reduce their level of pollution, again, in this case, carbon.

Oscardela wrote: »

If you only want to discuss issues such as "paying" for carbon used, and avoid the bigger questions about why it should be "paid" for and whether or not the reasons behind "paying" for carbon is legitimate. then I suppose that more or less brings this discussion here to a close, as I question the basis on which these taxes are levied. As you appear to forbid discussion of that here, then that appears to being this conversation to an end.

In-thread discussion of moderation is not allowed. If you continue to discuss it, I will ban you for a period of time. You can take it up by PM if you wish.

Posters have had and continue to have plenty of opportunity to rehash the climate change debate on this form and I will not allow accusations to the contrary.

Oscardela

Macha wrote: »

Well then your paragraph really doesn't make any sense given the facts.


Because there is a cost associated with emitting carbon. And there are three main reasons for a carbon tax:
1) The "polluter pays" principle: the person who pollutes (ie in this case emit carbon) should pay for what they emit, as opposed to leaving it up to the rest of society to pick up the tab
2) The contribution from the carbon tax can go towards mitigation, pollution-reducing measures or dealing with the actual costs of the pollution.
3) The tax incentivises people to reduce their level of pollution, again, in this case, carbon.


In-thread discussion of moderation is not allowed. If you continue to discuss it, I will ban you for a period of time. You can take it up by PM if you wish.

Posters have had and continue to have plenty of opportunity to rehash the climate change debate on this form and I will not allow accusations to the contrary.

Carbon dioxide is not a pollutant.

Macha

Oscardela wrote: »

Carbon dioxide is not a pollutant.

Oscardela, I respect your opinion on this but please keep discussions on the wider issues of carbon dioxide and anthropogenic climate change for threads specifically on that topic.

thanks.

gullon

Macha wrote: »

It means that carbon is a pollutant and as such, there is a cost involved in creating and emitting it. .

Can you please explian how carbon is a pollutant.

Macha

gullon wrote: »

Can you please explian how carbon is a pollutant.

gullon, I'm not going to say it again - no in-thread discussion of moderation and keep that discussion for the relevant thread.

gullon

Macha wrote: »

gullon, I'm not going to say it again - no in-thread discussion of moderation and keep that discussion for the relevant thread.

One of the main tenets of your argument for carbon tax, as stated by you in previous posts on this thread, is that carbon is a pollutant.

Again, I ask, can you please explain how carbon is a pollutant?

I wish to point out that I am not discussing moderation, anthropogenic climate change or carbon dioxide.

Macha

gullon wrote: »

One of the main tenets of your argument for carbon tax, as stated by you in previous posts on this thread, is that carbon is a pollutant.

Again, I ask, can you please explain how carbon is a pollutant?

I wish to point out that I am not discussing moderation, anthropogenic climate change or carbon dioxide.

You are discussing moderation in-thread and are therefore banned for 3 days.

As I have stated repeatedly, the discussion of whether carbon dioxide is a pollutant and anthropogenic climate change in general should be kept for threads on that topic. This thread is not about AGW - it is about a carbon tax.