Carbon Pricing to promote Public Goods

Carbon Pricing for Public GoodsGeneva, January 25. By Adam Koniuszewski, GCSP Fellow

The Cost of Carbon Pollution

The enormous economic, social and environmental costs of climate change have been widely recognized since Nicholas Stern worked on quantifying them a decade ago. These costs however remain largely unaccounted for in the marketplace. This failure to apply the polluter pays principle distorts prices, encourages carbon pollution, and gives fossil fuels a competitive price advantage over cleaner alternatives.

Pricing Carbon

A number of nations, including Scandinavian countries, Switzerland and Italy, are trying to correct market signals by pricing carbon. In 2016, carbon pricing covered 13% of global emissions; a number that is expected to reach 50% of emissions by 2030. Carbon pricing, in the form of a tax or carbon trading, generated $50 billion in government revenues in 2015.

A “Framework Convention for Carbon Control” 

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The author suggests that carbon pricing experiences have produced valuable lessons for more governments to adopt it. In fact, there is now a compelling case for creating a “Framework Convention on Carbon Control” (FCCC) and an independent agency to oversee all aspects of carbon emissions and sequestration. Inspired by the successes of the “Framework Convention for Tobacco Control” (FCTC) in alleviating the smoking epidemic, the carbon control convention would be designed to fix market failures and insufficiencies that create de facto subsidies for carbon pollution.

The author also suggests that by ending fossil subsidies and implementing carbon pricing, nations can generate a revenue base that could be used to reduce corporate and personal income taxes. In addition to supporting national priorities like health and education, carbon finance can also fund the universal goals represented by 2030 sustainable development agenda.

For more see:  Winning the Tax Wars – Tax Competition and Cooperation 

Published by Wolters Kluwer, Jan 2018 (see chapter 9)

About “Winning the Tax Wars”

Tax Wars Book FlyerThe book is the outcome of the 2016 TaxCOOP conference at the World Bank in Washington DC on the impacts / solutions to international tax competition. It covers transfer pricing / profit allocation between tax jurisdictions, the need for compliance, investigations and protecting whistleblowers, wealth taxation in an increasingly unequal world, derivatives and hedge-funds, tax investigations, electronic commerce and crypto-currencies, and sin taxes. Its authors, editors and experts include: Brigitte Alepin, Blanca Moreno-Dodson, Louise Otis, Allison Christians, Vanessa Houlder, Lyne Latulippe, Patricio V. Marquez, Richard Murphy, Erika Siu, Eric M. Zolt and Adam Koniuszewski.

About TaxCOOP

TaxCOOP is an international independent and nonpartisan conference on tax competition and the weaknesses of the current tax system in the era of globalisation. Thanks to its various initiatives, TaxCOOP is now recognised as one of the most influential tax initiatives globally.

 

Winning the Tax Wars

I authored the chapter on Carbon Pricing in this new and most timely book on global tax competition: Winning the Tax Wars:

Tax Wars Book Flyer

Tax Wars Book  Flyer2.jpg

The book, resulting from a TaxCOOP Conference at the World Bank in Washington DC in 2016, covers how tax competition has evolved and its impact on developed and developing countries, the state of play when it comes to multinationals and transfer pricing / profit allocation between tax jurisdictions, the need for compliance, investigations and protecting whistleblowers, the need for a wealth tax in an increasingly unequal world, and, tobacco taxation.

A full chapter is devoted to promoting public goods and addressing climate change through carbon pricing along with recommendations to solve the growing crisis of tax competition represents my contribution to this important and authoritative work.

For more about Taxing Wealth by Richard Murphy check here.

The last TaxCOOP Conference took place at the United Nations Office at Geneva on October 16, 2017.

 

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Thanks to such initiatives, TaxCOOP has become the only conference in the  top 50 most influential on the global tax scene.

TaxCOOP Top50

More on this soon.

 

 

Montreal, Cycling to Prosperity!

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24,000 Montrealers bike to work every day. In North America, only New York, with a population four times greater, has more daily commuters (36,000) according to the latest report of Vélo Quebec.

Montreal, cycling capital of North America

One reason for this success is that over 30 years ago Montreal started investing in segregated bike lanes to make cycling safe and enjoyable. In downtown, 4% of all commutes are by bike. In Plateau Mont-Royal 10.8%! a level comparable with Vienna, Stockholm and Berlin.

A great potential

With every third Montrealer living within 5km from work, a study by the mobility school of Ecole Polytechnique assessed that 22% of all car trips in the city could easily be biked. A huge potential for more cyclists in the Metropole.

Investing $150 million for cyclists!

As part of its sustainable mobility strategy, Montreal is thus planning additional investment that could reach $150 million (with $15 million this year) to grow its already impressive bike lane network from 730km to 1,280km – to the joy of cyclists and the rage of some drivers… But is it worth it?

A wise investment

A recent Lund University (Sweden) study of cycling in Copenhagen concluded that cars impose costs on society from air pollution, climate change, noise, road wear, health and congestion. In economic terms this represents a negatively impact from cars of EUR 0.50 per kilometer vs. only EUR 0.08 for bikes…

When the impact for society as a whole is considered, every kilometer driven costs the community EUR 0.15. Meanwhile, society benefits EUR 0.16 per kilometer cycled! 

Conclusion: Bike for prosperity!

Related links: 

Tour de l’ile de Montreal

Montreal Go for it by night Festival

Montreal biking investments 2016-17

Velo Quebec Report on Biking in Montreal 2015

Road safety: rage agains cyclists

NATO, Justin Trudeau and responsible citizenship

Trudeau_36The heads of state and heads of government of the 28 North Atlantic Treaty Organization countries gathered in Poland last Friday and Saturday (July 8-9) for what many consider the most important NATO meeting since the end of the cold war. Hence, many were surprised to see Canada’s superstar Prime Minister Justin Trudeau arriving with his 9 year old son Xavier.

Early immersion in global affairs

But Justin also got an early introduction to the world of diplomacy and global affairs. Imagine the shock 40 years ago when the late Pierre Elliott Trudeau showed up with eight year-old Justin to meet the Iron Lady, British Prime Minister Margaret Thatcher.

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Surely, his father had a profound impact on him and his influence got him to become Prime Minister.

“All my life I had wanted more than anything to become a dad. I was inspired by the extraordinary father I’d had, the example he set for me to follow.”

A man of integrity and conviction, Pierre Trudeau cherished the importance of universal  human rights, responsible citizenship, care for the environment and Canada’s role in the world. These are the focus of the Pierre Elliott Trudeau Foundation, an independent and non-partisan charity established in memory of the Late Right Honourable Pierre Elliott Trudeau. These priorities also come out as important for Justin Trudeau and we can  foresee that Xavier will someday work towards them as well.

Education about global issues

Not everyone can have a Prime Minister as a parent but all young people should have access to education about global issues. Education is the critical first step to transform individuals into engaged citizens and actors of change in their communities.

The “Education is a Window to the World” program run by The Bridge Foundation engages opinion leaders and youth on sustainable development and global issues.

Was air pollution a factor when Portugal beat Poland?

poland-vs-portugal-live-streaming

A research team at the IZA Economic Institute in Bonn (Germany) found that air pollution significantly impacts the performance of football players, even when measured pollution is below what the EU considers “safe level” thresholds. Above those concentrations, the measured decline in performance reached as much as 16%!

The World Health Organization reported that outdoor air pollution in cities for fine particles (called PM2.5 being smaller then 2.5 microns including dust, exhausts and coal combustion) was almost three times higher in Poland than in Portugal (28.7 vs. 10.8 ug/m3). Health effects include asthma and respiratory diseases such as lung cancer – children, the elderly and those with lung or heart disease are most at risk.

Outdoor air pollution causes 3.7 million premature deaths around the world according to Dr. Maria Neira, WHO Director for public health, environmental and social determinants of health.

In December 2015, the European Commission referred Poland to the EU Court of Justice for persistently high and dangerous levels of air pollution – mostly coming from household heating and road traffic. The Commission deemed that measures taken by the authorities were inadequate.

While we cannot attribute the victory of Portugal to pollution, it is clear that poor air quality affects more then just the quality of football games. Urgent action is needed!

Obama Hiroshima visit and hopes for a nuke-free world

Following the April trip to Hiroshima by John Kerry, the scene is set for the first visit of a US President to the sites where America dropped the bomb in August 1945. Having taken the world into the atomic age, America has a special obligation to rid the world of nuclear weapons.

2B1BDF6F00000578-0-image-m-45_1438771097176Tomorrow’s visit (May 27) will be a side-trip to the G7 summit hosted by Japan and is already perceived as a major success for the Japanese Prime Minister and a show of strength of Japanese-American relations in the face of an increasingly assertive Chinese presence in the region. Surely, it will do nothing to appease the Chinese and South Korean grievances for Japanese atrocities inflicted on them in the first half of the 20th century.

In 2009 already, Obama said that achieving a world without nuclear weapons is fundamental for American security and for peace in the world. During the cold war nukes could have erased the world as we know it in a flash of light. Today the cold war is over but the legacy of thousands of nuclear weapons remains with the paradox of a higher risk of a nuclear attack occurring. With the proliferation of nuclear secrets and technology, more countries have nuclear weapons and it is easier for terrorist groups to gain access to them.

President Obama is right that global peace and security demands ridding the world of nuclear weapons and that America has a moral responsibility to lead. How much can be achieved without inflaming existing tensions remains to be seen. Obama’s legacy on peace could be in the making here. With much criticism already voiced back home and more coming from North Korea, we will find out soon enough.

Links of Interest:

Lawyers for a Nuclear Free World

States with Nuclear Weapons

Of Science and Human Values in the Nuclear Age

Parliamentarians for Nuclear Disarmament

UNFOLD ZERO

Huffington Post: Time To Engage In Nuclear Disarmament

 

Reinventing Energy Services with Scott Foster

What would we do without energy? from smartphones to transportation our way of life runs on energy. But faced with the realities of climate change and 1.3 billion who lack access to modern energy, Scott Foster from the UN Economic Commission for Europe (UNECE) argues that we have got the energy equation seriously wrong and need to change the way we think about energy.

Energy as a Service

We can meet the challenges of sustainable development and climate change if we think of energy as a service instead of a commodity. Scott argues that we want hot showers and cold beers not barrels of oil or kilowatt-hours of electricity. Fostering this revolution to think in terms of services and obtaining this value most efficiently will radically reduce waste, improve efficiency and help address climate change and energy poverty.     hot shower cold beer

Transforming Energy Utilities

There is a compelling business case for transforming energy utilities into service providers because they have the financial capacity, the expertise and the business partners to make it happen. Most importantly, we know it works! The successful experience of California where it was  implemented after the oil crisis in 1978 for gas and 1982 for electricity shows has been replicated in 15 other American states for electricity and 23 for gas, with legislation pending for 12 other states.

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Incentives for the market to work

The winning formula is to share part of the savings between the end users and the utility so that the energy provider works for its customers to lower energy consumption and reduce energy bills. Sharing savings turns out to be more profitable then selling more energy which aligns the interests of all parties in a win-win relationship. A far cry from the traditional model of selling ever more energy that has fostered massive investment in efficiency, renewables and innovation while creating jobs, growing the economy with the added benefits of lower carbon and environmental and footprints. It is high time we put this experience to test in Europe other parts of the world…