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

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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.

 

 

ISO, Standards & Climate Change

the-1999-NASA-Mars-Climate-OrbiterIt is hard to overstate the importance of standards. In many ways, they represent the essential ingredient that allows us to function. But famous disasters remind us that we cannot take this for granted. In 1999, NASA lost its $125 million Mars Climate Orbiter spacecraft after a 10-month, 400-million kilometer journey to Mars because some of its engineers used the metric system while the others used the imperial measurement system. As a result, when the spacecraft entered the Mars atmosphere at an altitude of 60km, instead of the 150km required, it disintegrated. The disaster cost $330 million, caused major embarrassment to NASA and a serious blow to the American space program.

IMG_0830This is why the work of the Geneva-based International Organization for Standardization (ISO) to develop and promote standards is so important and why I was pleased to learn about ISO’s growing commitment to climate change and why I am happy to join ISO’s NEXTGen Global Climate Change initiative for young professionals from around the world. This 6-week program is focused on what needs to be done, how international standards can help and how young professionals can get involved. The global kickoff took place last week (August 6, 2014) with an online Google+ Hangout that is available on YouTube for those who missed it.

While the project is forward-looking, a historical perspective on how standards can help reduce carbon emissions is useful and the success story of energy efficiency standards for household appliances is a case in point. Let’s look at refrigerators for illustration. Why? Because they are constantly on and typically represent the most energy hungry item in a home.

Between the 1950-70’s refrigerators have more then doubled in size but their energy use increased almost fivefold. How is this possible? Marketing departments wanting to increase the available inside space decided to cut down on insulation. A product “innovation” that caused skyrocketing energy consumption. Countrywide, this trend would have required 175 GW (gigawatt) of electricity today. But thanks to almost four decades of energy efficiency standards, America now needs less then 15 GW. The difference represents the equivalent of eliminating 400 large coal power plants.

Need for StandardsContext is important. The 1973-74 oil-crisis saw barrels of oil go from $3 to $12 and energy efficiency became recognized as critical for energy independence and national security. California introduced the first wave of mandatory efficiency standards in 1978 and over the years, efficiency standards became the driving force for innovation and continue to do so. Initial objections by industry of rising prices and adverse economic impacts did not materialize. To the contrary, prices fell by two-thirds and industry welcomed new standard as an opportunity to market improvements and boost sales. This process of continuous improvement has helped innovation, competition and profitability while creating jobs. The new products are not only cheaper for consumers they also offer a better environmental performance which is a win-win for everyone.

As chair of the ISO Climate Change Technical Committee (ISO/TC 207/SC 7), Tom Baumann is well aware of the importance of standards to help corporations manage their greenhouse gas emissions for environmental stewardship but also to manage risk and improve business performance. This is why over 3,000 corporations and 800 institutional investors with assets under management of $92 trillion are already partnering with the Carbon Disclosure Project for their carbon footprint management. Blackberry’s Kelly Killby agrees that ISO standards have helped improve environmental and business performance. Thanks to the implementation of ISO standards, Blackberry has reduced waste to landfills by 90% in 2013 and reinvested the cost savings into other sustainability initiatives.

Climate change represents the defining challenge of our generation and will require the cooperation of all sectors of modern society: private enterprise, government and civil society. Given that it is crosscutting, it will mean that all professions will have to work together with a common sense of purpose and a shared understanding of what needs to be achieved. We know that reducing emissions is possible at the individual, organization and community levels. According to Johnathan Fung, moderator of the ISO Climate Change Group, the challenge now is how to scale-up solutions for climate change mitigation and adaptation for regional and global impact. A process in which standards will play a critical role. This will be one of the objectives of NextGen during the next six weeks.  Young professionals from around the world are most welcome to participate and contribute.

Find out more at: ISO NEXTGen, on Facebook and check out the Webinar.

More on this soon.