Is Carbon Tax a solution for our emissions problems?

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What is Carbon Tax?

A carbon tax is a form of carbon pricing by taxing fuels that contain carbon. Every hydrocarbon fuel (coal, petroleum, and natural gas) contains carbon which is released as carbon dioxide (CO2), the main greenhouse gas in our atmosphere, once these fuels are burned. A number of countries have implemented carbon taxes or energy taxes that are related to carbon content. Most environmentally related taxes with implications for greenhouse gas emissions are levied on energy products and motor vehicles, rather than on CO2 emissions directly.

From a theoretical economic perspective, carbon taxes help to address the problem of emitters of greenhouse gases by making them pay the so called “social cost” of their actions. However, carbon taxes can be viewed as regressive taxes, in that they may directly or indirectly affect low-income groups disproportionately.

“Raising prices reduces demand”

mankiw500wideAccording to Gregory Mankiw, Professor of Economics at Harvard University, who was featured in the newest NatGeo documentary “Before the Flood”, lesson number 1 of Economics is “if there is a tax that raises the price of some product/service, people will tend to consume less of it”. Mankiw, who has worked with former Republican candidates such as Mitt Romney and John McCain and with the Bush administration, uses this argument as a justification for the implementation of a carbon tax. According to estimations, by 2060, climate change will have cost a total of $44 Trillion USD and the professor’s view is that this tax could help tackling global change by dodging people into the direction of doing the right choices and adopt a more sustainable lifestyle.

Carbon tax may not be the answer

But is Mankiw correct? …In my opinion, carbon tax may not be the solution to the climate crisis we are facing today and will face throughout the rest of this century, and to justify my disbelief I will give two reasons.

First, Carbon tax is relying on the same sort of beliefs as trickle-down economics and Keynesian policies, which is that economics can predict exactly the behavior of the masses, thus regarding people as discrete, easily predictable parameters. The problem with carbon tax is that the consequences may not be that easy to predict, thus undermining the feasibility of such assumptions, as they often fail to consider factors that lead to completely different outcomes in the public’s behavior.

The goal of this kind of mitigation policy is to catalyze the transition from fossil fuels to renewable energy sources, in particular with regard to vehicles and heating. What carbon tax would do is to put the financial burden of climate change on citizen’s wallets, thus putting people in an even tighter stranglehold through yet another tax, slashing their purchase power.

A vicious cycle

carsIf carbon tax is imposed, I am concerned that people won’t be able to afford to switch to carbon free energy sources and transportation due to scarcity and uncompetitive prices. Then the vicious cycle begins: people who have less purchase power will be obliged to pay the carbon tax and their purchase power will be reduced even further.

industryAdditionally, carbon tax applied on industries may not drive those industries to adopt low carbon technologies, due to the fact that they could easily dodge such tax by increasing prices and then the consumers would be the ones absorbing all the impact. Another weakness of the carbon tax is that it doesn’t necessarily imply a reduction of carbon emissions but rather allows governments to “make a profit” out of it, as it derives income from taxes.

There is now the urgent need to cut carbon emissions in order to meet the Paris agreement goals of a 1.5ºC warming. Therefore, one can use Ronal Reagan’s own words to say “Carbon tax is not the solution, it is part of the problem”.2

Alternatives to carbon tax

There are a number of ways in which we could tackle carbon emissions more effectively and none of them requires increasing taxes on the working people, for example:

  • Having an efficient, high-quality public transport network with affordable ticket prices,
  • Subsidizing electric vehicles, making them more affordable,
  • Or even banning carbon emitting energy sources and vehicles from the market, the most extreme but also the most effective measure.

In this scenario, with the absence of carbon emitting energy sources on the market, people will switch to clean (renewable) energies and we would finally be in a position where our targets could be achieved.

Let’s look at asbestos as an example: the use of asbestos is forbidden since it poses a major threat to public health; no one can even buy asbestos to use as a construction material. This solves the asbestos problem and we no longer have to worry about the occupational health and safety of people as to what exposure to asbestos concerns. Now, if we adopt the same position towards dirty energy sources and vehicles, we could finally take the step that needs to be taken and open the door to a carbon-free future.

Alex

Youth fun with EVS energy promoters.

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On Wednesday 9th November our EVS volunteers, Kate and Andrea, visited the Youth Café in Drumshanbo to develop an activity programme on Renewable Energy with a group of kids between 10-12 years old.

The purpose of the programme is to understand what children know about the environment and what they are interested in. Our final goal is to arouse their interest in environmental protection and to recognise how we can protect the planet.

We organised different activities: first an icebreaker to get familiar with our group and try to have fun and know each other. After, a game to understand how important land is and the impact of climate change (floods, droughts, hurricanes) on those who lose their land. Finally we used different pictures related to pollution, recycling, energy, wildlife, and we discussed them. For Kate it was really interesting to explain to them what a hydroelectric power station is and how it works.

The children were full of energy and creativity, really engaged with the activities and we understand that they would like to have more sessions with us! We had great support from youth’s centre workers who helped us with all the activities.

It was our first experience with the group and we have found it a perfect combination of learning and fun! It was really interesting to see how all of them began thinking in a different way. We are looking forward to working with them again!

COMMUNITY ENERGY CO-OPS

cultivateCULTIVATE.IE

September 22: National Ploughing Championship

GEAI again had a stand this year with Irish Environmental Network at the National Ploughing Championships on Tuesday 22nd September, a good occasion to publicise our campaign against Fracking and our promotion of Renewable Energies.  Three of us volunteers – Olga, Alice and Cedric were part of the GEAI team

The 3D model of Manorhamilton area was the main attraction

The 3D model of Manorhamilton area was an attraction

For Ireland this was the perfect occasion to show the very best of food, farming and culture. Casseroles, tires, candies, pipes, trees, meat, etc. The list of what you can see in National Ploughing Championships is long. People from all counties went there to enjoy good time with family or with friends. But, it can be also a perfect occasion for a good deal. Indeed, is a very good place, as a company, to show your merchandise or innovations and for the visitors because you can find everything in one place, from food to tractors and the stands are more impressive every year.

Crowds

Crowds

Like last year, GEAI was present for the event. The NGO shared a tent with the Environmental Pillar and the team was ready to offer information to our visitors, of all ages. It was great to see children interested and students taking serious their courses and trying to find out more information.

GEAI team

GEAI team

Last year, National Ploughing Championships attracted a record 279,500 visitors. As the flow of traffic from the car parks left this evening on the final day of the 2015 Ploughing Championships, the total attendance figure came to a record breaking 281,00 over the 3 days. This marks the most successful National Ploughing Championships in history.

Stunning success of Renewable Energies – Prosperous Communities!

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The event “Renewable Energies – Prosperous Communities” has been a success. Yesterday, almost 100 people gathered in Manorhamilton to take their energy future into their own hands. The main outcome of this pioneering event was the decision to develop a plan for community-owned renewable energy projects in North Leitrim. The event, organised by Good Energies Alliance Ireland and Love Leitrim was also intensively followed on social media and it was livestreamed globally.

Pauline Gallacher, Neilston Trust (Scotland), Eamon Ryan, Green Party leader, and Cormac Walsh, Energy Co-operatives Ireland, were the main speakers. Gallacher’s presentation was one of the most inspiring ones. “Use community-owned energy to stimulate ownership of the carbon emission reduction agenda and harness your own resources to build your own sustainable future”, she told to the Irish audience.

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“Renewable Energies – Prosperous Communities” was aimed at raising awareness of the opportunities open to local communities to benefit from renewable energies, look at the potential to generate income and jobs for the community and identify local champions of renewable energy. During the day all the people attending had the chance to learn about successful community-owned experiences from Ireland and Scotland and also to raise every question, doubt and misunderstanding they might have had.

“We are delighted with the success of the event” GEAI director Aedín McLoughlin said at the end of this day of workshops and discussions. “It was great to see so many people , but this is only the first step of a bigger project. Renewables can be the source to re-energise rural communities, bringing jobs and income, and we want to replicate this event in many towns and villages across Ireland, providing sustainable alternatives for fossil fuels”, McLoughlin stated.

More pictures on Flickr!

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