From page 99 of Ireland's Recovery Plan - the carbon tax, introduced in the 2010 budget at €15 per tonne will increase by €10 in 2012 and a further €5 in 2014. This is dressed up in the document as a climate change measure, and so it is, but one has to wonder whether a doubling over 4 years would have happened if Irish finances had not been in such a dire state.
As do many others, I worry about carbon taxes because they pre-determine a price for carbon and do not necessarily deliver the required emissions reduction. That's not to say that cap and trade does not have its problems either - especially all the issues around grandfathering rights. However, it will be fascinating to see if it is possible to discern any effect from this fairly steep increase. Somehow I think the general noise from all the other measures being undertaken by the Irish Government will thoroughly mask any meaningful analysis - and the perennial counterfactual issue remains.
P.S. And I see that there is also a pledge to charge for domestic water by 2014 (page 77). Now this really does set up the possibility of a wide scale experiment in the effects of per unit charging on demand. Incidentally, the document is commendably honest in portraying this primarily as a cost saving measure, not as a demand reduction, conservation, measure.
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