Rhein on Energy and Climate

In the last 20 years international climate conferences have produced no more than lengthy unintelligible papers without targeted actions addressed to participants. As a result, we have been through 20 such conferences without any positive impact on global climate.

The Paris Conference is meant to be more productive. So far its only potential improvement is the call upon the 200 odd-participants, in particular the major emitter countries, to announce their national 2030 “intentions” for reducing emissions and raising the share of renewable energies. At present, no more than a quarter of participants covering about half of global emissions have transmitted their intentions to the Secretariat.

These make up a mixed bag:

  • The EU has committed to reduce emissions until 2030 by 40 per cent through measures that follow up on a decade of proven climate policy. Until 2050 the EU aims at reducing emissions by at least 75 per cent, which all other big emitter countries should equally note as mandatory targets for keeping the earth within a two centigrade ceiling.
  • China, the biggest emitter country, responsible for almost a third of global emissions, is not ready cutting emissions before 2030 but only for peaking them. The world community should not accept such an “offer” under the pretext of being a “developing country” which China has ceased to be with a per capita income of$ 12 000 and annual per capita emissions of seven tons, comparable to the EU.
  • USA, the second-biggest emitter country, has started the decline of its emissions, but aiming only at reducing emissions by about 27 per cent until 2025. Considering the exorbitant per capita emissions of more than 15 tons per year this is not good enough either.

The announcements made by Japan, Russia, India, South Korea and Canada, five other major emitters, are no more impressive than those of China; and the “measures” to be taken by the various countries for implementing their “intentions”remain vague and difficult to monitor.

The first six months of 2015 have been the hottest in history. This should drive humanity to accelerate the fight against climate change through effective action.

But international climate policy makers have never asked about how to combat climate change most effectively. Taxing fossil fuels has always been taboo. As long as the international community refuses to tackle taxation it is bound to lose the battle against climate change. High fossil fuel prices are a necessity to induce business and private consumers to reduce their fossil fuel consumption That is the more urgent when fossil energy prices have fallen by half within a few months as a consequence of a global over-supply.

In such a situation, policy makers would be irresponsible not to abolish fossil energy subsidies and to raise taxes on fossil fuels for transport, heating and power generation substantially, say some 50 per cent of the final price. The extra tax receipts might help reduce excessive state debts, lower income taxes and finance investments in renewable energies and energy efficiency.

Such tax shift would improve the competitiveness of renewable energies and energy efficiency. Policy makers should target for at least 50 per cent taxation of the final price.

Taxation may take different modalities. To reach a large chunk of energy consumed for heating and transport, taxation should hit consumption directly through excise taxes.

The Paris Conference will hardly be able to have a thorough debate on taxing fossil energies. Time will be short for the necessary preparation. The Conference should therefore decide to hold a special energy taxation conference in early 2016 with the mission of preparing policy proposals for the 2016 Climate Conference.

Brussels 27.07 2015 Eberhard Rhein

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