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.

 

 

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…

 

Powering Forward, by Bill Ritter, JR.

PoweringForwardAs “Powering Forward: What Every American Should Know about the Energy Revolution” becomes available for sale today, I am grateful to Bill Ritter, his team at the “Center for the New Energy Economy” (CNEE) at Colorado State University and to Fulcrum Books for providing a copy of the book for this review.

Bill Ritter Jr. knows a thing or two about the energy revolution and the sun that is setting on the fossil fuel industry. As Governor of Colorado, he turned the State into a leader in clean energy and then launched the “Center for the New Energy Economy” (CNEE) to help other states accelerate their transition to a clean-energy future.

Having hosted Gov. Ritter at the Geneva “Green and Inclusive Economy” Conference ahead of the Paris climate summit, I was familiar with his work as governor and at the CNEE including the need to address climate change, the cost of clean versus fossil energy and green jobs. All are well covered, as one would expect in such a book. But “Powering Forward” is different in that it goes much further to address the role of science and education, the need for well informed citizens for a functioning democracy and how biased and misleading media coverage has helped the climate denial industry. But his most important contribution is to shed some light on the government intervention versus the free-market myth and his attempt to turn a divisive energy debate into a consensual and bi-partisan quest for a better future.

The Myth of the Invisible Hand

For many, government intervention amounts to “corporate welfare” and invariably drives up costs for consumers. It may therefore come as a surprise that fossil fuels have been subsidized since 1916 and that American energy utilities have been run as quasi monopolies with no competition. While most will agree that governments should not pick winners or losers, thinking that energy markets are “free” is a misinformed illusion. The reality is that government still largely favours fossil fuels with obsolete policies from the carbon age that are slowing down innovation, artificially restricting consumer choice and undermining American energy security.

The Tea Party Turns Green in Georgia

A good example comes from Georgia where the Sierra Club and the local Tea Party took on the monopolistic energy structure. It did not sit well with them that people could not choose where they get their electricity from and they forced a change in law to allow customers the ability to generate their own electricity and sell it back to the grid.

Consensual and Bi-Partisan

Business as usual is no longer an option. We are at the crossroad and must now decide if we will become the victims of our future or its architects. By working together and reconciling our differences we can turn scarcity into abundance and crisis into opportunity. This is the key contribution of Powering Forward.

Powering Forward Energy Facts: 

– Scientists understood the link between CO2 and the greenhouse effect in the late 1800s

– Lyndon Johnson is the first US president to raise the climate alert in 1965

– In 2006, Colorado College warned there would be no more skiing in the state by 2050

– On windy days 60% of the electricity in Colorado comes from wind

– At $25 per megawatt hour, wind power is over 20% cheaper then natural gas

Centralized power wastes up to 2/3 of the primary energy put into the system

Americans prefer energy conservation to energy production

– 87% of Americans think the US government should act about climate change

– The US Department of Defense sees climate change as a threat multiplier

– The IMF estimates fossil fuel subsidies at nearly $2 trillion including external costs. Most of the income is received by the wealthiest according to the IEA

US fossil subsidies amount to $2,180 for each man, woman and child annually

– The true cost of coal-fired power amounts to some $0.27/kWh

6 of the top 10 solar manufacturers are Chinese

9 of the top 10 wind manufacturers are non-US

Warren Buffet is buying solar power for $0.038/kWh (the avg. price paid by US households is close to $0.12/kWh)

– Arizona’s energy utility installs free solar panels and pays its customers $30/ month for 20 years to feed power into the grid

COP21 – The birth of humanity

IMG_0188Here are some thoughts from Jean-Louis Servan-Schreiber, journalist, writer and Vice Chairperson of the Human Rights Watch board, on the historical climate agreement announced on December 12 at Le Bourget in Paris. I was honored to join Jean-Louis and Corinne Lepage to speak at the Conference on Youth (COY) that preceded the climate talks to present the Declaration of Rights of Humankind and its importance to youth and future generations. FRENCH VERSION

COP21 – The birth of humanity

The memory of the media will keep this joyful scene at Le Bourget when the announcement of the agreement at the COP21 was made. Since then, objections, criticism and analysis of its shortcomings abound. They were inevitable and many are warranted.

But the most important when it comes to the future of humanity could not be rational. The collective emotion, even fleeting, gave the world images of what has inspired us to come together. In this digital era, we will see these images again and again, so as no to forget that what unites us is ultimately more powerful then what divides us.

To meet this challenge, a snap of fingers will not be sufficient. It will take decades of effort by activists, governments, scientists, associations, artists and others. But most of all, it will be for each new generation to discover the world in which it lives.

This moment of unanimity gave existence to humanity, beyond nations, beliefs or interests. We felt for a few minutes how this little flame, nascent, fragile, still wavering, was for us and our children so infinitely precious.

The emotion of this final between negotiators exhausted and radiant is already listed heritage. 

Jean-Louis Servan-Schreiber

 

 

COP21 – La naissance de l’humanité

IMG_0188

Voici quelques réflexions de Jean-Louis Servan-Schreiber, journaliste, écrivain et membre du conseil d’administration de Human Rights Watch, sur l’accord sur le climat annoncé le 12 Décembre au Bourget à Paris. Avec Jean-Louis et Corinne Lepage nous avons présenté la Déclaration des droits de l’Humanité durant la Conférence sur la Jeunesse (Conference on Youth – COY) qui a précédé les négociations sur le climat. ENGLISH VERSION

COP21 – La naissance de l’humanité

La mémoire des médias gardera cette scène de liesse au Bourget dès l’annonce de l’accord climatique à la COP21. Depuis les objections, critiques et analyses de ses insuffisances ne manquent pas. Elles étaient inévitables et beaucoup sont fondées.

Mais le plus important quand il s’agit de l’avenir de l’humanité ne pouvait pas être que rationnel. L’émotion collective, même fugace a offert au monde, les images de ce qui nous rend tous solidaires. Grâce au numérique, nous les reverrons encore et encore, pour que personne ne puisse oublier que ce qui nous lie est plus impératif que ce qui nous divise.

Pour transformer cet essai, il ne suffira pas, comme au rugby d’un coup de pied magique. Il faudra, des décennies durant, les efforts des militants, des gouvernants, des savants, des associations, des artistes. Mais, plus que tout de chaque nouvelle génération découvrant le monde dans lequel elle va devoir vivre.

Ce moment d’unanimité a donné existence à l’humanité, au-delà des nations, des croyances, des intérêts. On a senti, pendant quelques minutes combien cette petite flamme naissante, fragile, encore vacillante, nous était pour nous et nos enfants si infiniment précieuse.

L’émotion de ce final entre négociateurs épuisés et rayonnants s’est déjà inscrite patrimoine de l’humanité.

Jean-Louis Servan-Schreiber

Smartphones explode power bills!

I was intrigued yesterday morning when I heard the Virgin Radio (France) host saying that mobile owners pay €70 a month to power their smartphones, ipods, tablets and laptops. It turns out this number relates to the annual cost but the point is no less alarming. The average household spends around €1,400/year on energy of which some €900 relate to electricity. According to the French Environment and Energy Management Agency (ADEME), 14% of this electricity relates to recharging phones and other devices – a very high figure which exceeds even the share of lighting that comes to 12%.

Smartphone

The agency warns that most of this power is wasted when the phone is left to charge overnight, even when it is turned off. The residual power that is wasted when devices are plugged in represents a pure waste equivalent to two nuclear power plants operating permanently at full capacity and a cost of €2 billion.

Imagine what could be achieved if such funds were invested into speeding the transition to a clean energy future.

Some smart ideas:

  • Most phones can be charged in two hours – leaving them to charge overnight is costly and wasteful.
  • Get an external battery to provide more autonomy when needed.
  • Go for a solar or wind powered charger!
  • Charge your phone as you ride – Check out CITYCYCLE.COM at LINK for great Christmas ideas for your favorite cyclist!soporte-finn-de-bike-city-guide1

COP21: more than expected, short of what’s needed

After over 20 years of climate talks, 195 countries reached a “universal, fair, dynamic and binding agreement” to “save the planet” by keeping global average temperature rise well below 2 degrees. The mood was euphoric and some delegates were in tears after the three sleepless nights that concluded ParisClimat2015. Having followed the preparations of this global forum, I was impressed by the efforts of the city of Paris, the French authorities and particularly by the personal engagement of the French President for an ambitious and historic outcome.

1.5 degrees target

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1.5 degrees target

I am proud that Canada, after a decade of obstruction and denial under the Harper administration, has come out in favor of a 1.5 degree objective under the leadership of newly-elected Justin Trudeau. Staying “well below 2 degrees” is now the stated target of the world community and Canada is back as a constructive force on the world scene. This leadership will be needed to if we are to turn this lofty objective into something meaningful in terms of climate action.

“Aspirational” Objective

The 1.5 degree goal reflects calls of small island states, climate scientists and civil society but the new ambitions do not yet translate into commensurate actions that would even have a remote chance of meeting the original so-called “safe” target of 2 degrees, let alone 1.5 – which would require much faster reductions in green-house-gases and methods of taking back some of the carbon that has already been emitted.

Growing science and reality gap 

Scientists have been warning that there is a time lag between the moment when carbon is released and the resulting temperature increase. This means that on top of the 0.9 degrees of warming that we are already experiencing, there is an extra 0.6 degrees that is already pre-programmed for the future – Dr. Thomas Frölicher, researcher at the Swiss Federal Institute of Technology has produced some interesting work in this area. For these reasons, in time we will reach the 1.5 degree target and beyond as we continue to burn carbon.

On track for 3 degrees and more

Commitments by member states for COP21 put us on the 3 degree or more path. Well above the 1.5 degree goal. It is therefore urgent to transform this new target into meaningful policy, to change business models and make sure that we all change our behaviors – something that is far from achieved and which implies much deeper emission cuts then was is currently planned.

Timing is critical

Delegates and politicians still think that climate change is a slow, gradual and linear process. This is not supported by science. In fact, the process is not-linear and there is now a real risk of hitting tipping points that could accelerate climate disruptions with catastrophic consequences. This is why the 2020 entry into force and the 5-year reviews that would start in 2025 are disappointing.

Common but differentiated responsibilities

All countries will have to participate in the carbon reductions but rich countries must help to finance this transition in the developing world by contributing a minimum of $100 billion per year starting in 2020 – a figure that will be revised upwards in 2025. The good news is that new powerhouses like China and South Korea will contribute to this effort. It is also encouraging that countries like India will adopt a low-carbon path for their development, something that was far from achieved just a few days ago.

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Wind Energy Tree at COP21 in Paris

The end of the fossil fuel era

One message from the COP is  that the good days of the fossil fuel era are behind us. Fossil fuel subsidies should be phased-out and we will move towards a price on carbon to speed up the transition to a clean energy economy.

Just the beginning

As Chinese President Xi Jinping said at the opening of COP21 on November 30th, this agreement is just the beginning of a process, echoing warnings from British Climate Ambassador, Sir David King, that carbon reduction targets must be reviewed regularly to accelerate the transition to a low-carbon future. From where we stand today and despite decades of work, it sure seems that we are still at ground zero.