Phase 2 of the carbon tax

Harry McGee reminds us that as of today a carbon tax will be levied on selected home heating fuels. Transport fuels were carbon-taxed already, and the remaining home heating fuels (the ones that contribute most to climate change) will follow at an unspecified later date. There are no plans to tax greenhouse gas emissions other than carbon dioxide (e.g., by imposing a methane levy on beef consumption).

The report also gives voice to the opposition. If my predictions are correct, they will now discover that a carbon tax does not really hurt.

McGee also quotes a spokesman of Minister Gormley saying that other taxes were reduced. I had missed that.

34 thoughts on “Phase 2 of the carbon tax”

  1. Perhaps vrt or road tax reduction???
    In fact phase out road tax and keep the tax on fuel.
    And do a nct on the roads as well as the cars

  2. @RT: Is there a ‘carbon levy’ on aviation kerosene and fuel oil for marine use? Levy on agri. sector = increased food costs. That’s good???

    Any tax or levy imposed on consumers will translate into reduced ‘consumption’. So GDP will increase! Hmmmm. And we DO need GDP to decrease/increase?

    Ah, what the hell, borrow and be damned! You reckon there might be a very serious logic deficit somewhere? Sure looks like it.

    B Peter

  3. @ Garo: Garvin was marvellous! Skilled Incompetence and Successful Failure come to mind: heroic levels of –

    Apropos economists and their contribution to … whatever. Now if one could only qualify as an economist AFTER one qualified as a scientist or engineer!

    B Peter

  4. Now if one could only qualify as an economist AFTER one qualified as a scientist or engineer!

    Scientists and engineers deal in observable reality, though, and not in voodoo. Ergo one would have to divest oneself of reasoning and observational skills to ‘become’ an economist as it usually appears to be practiced.

  5. @ EWI: Oh dear! and here was me thinking … …

    Could I become a ‘virtual economist’ then?

    B Peter

  6. So now that phase II is implemented.

    When do we start on phase III?

    With the Euro weak and oil at around $85 when will we hit 2E / litre for petrol?

  7. Could I become a ‘virtual economist’ then?

    That path usually involves reading Ayn Rand in one’s teens (and never growing out of it).

  8. “McGee also quotes a spokesman of Minister Gormley saying that other taxes were reduced. I had missed that.”
    Of course taxes are reduced: tax income is down 15% 2010Q1 compared to 2009Q1. It’s all in the DoF monthly ‘Analysis of Taxation Receipts’.

    Tax rates have reduced for VAT. Corporation tax for new companies has been zero rated for 3 years. VRT and motor tax is reduced for many categories of vehicle.

    It’s probably now time for a euro harmonised airline landing tax and cow flatulence tax.

  9. I hope you guys don’t genuinely think Rand and Rockwell (about whom I must admit I never heard of until now) are representative of economic thinking.

    Getting back on topic, it does seem odd that coal and peat weren’t the first targets. Nat gas, gas oil and red diesel (I assume that’s what ‘marked gas oil’ is?) is a decent start though I guess.

    Does anyone know if the fuel oil tax apply to bunkers?

  10. @ MarcusOC,

    I would never have thought of Ireland as a major place for ships to bunker. It is not as if Dublin Port is like Singapore.

    To be honest I don’t think it is possible to load bunkers in Ireland, unless it is diesel oil.

  11. The Enviro-Skeptic’s Manifesto

    I thought that would have just involved sticking fingers in one’s ears.

    (I’m staying away from Tols’ previous thread. I’ll admire John Gibbons’ restraint if he doesn’t sue for libel over half of what’s in it)

  12. @ RT: Thanks for info. I had an idea they were exempt, but was not sure. Carbon emissions from shipping are pretty significant. Ditto for aircraft.

    @ EWI: I knew there had to be a ‘catch’. I’ll stick with Galbraith pere!

    B Peter

  13. @ Sporthog

    Know what you mean, but I’d presume large long-hauls (if many) bunker fuel oil at discharge. Not really that important in any case I guess, just thought it was weird that fuel oil was specifically included (it’s not used for power in Ireland is it?).

    It’ll be interesting to see how they’re planning to combat coal arbitrage.

  14. @ MarcusOC,

    Good point, I think Poolbeg power station burnt F.O. in the past, as did Great Island in Waterford. However Poolbeg is decomissioned now, and I am not sure about Great Island. In fact I think Great Island was sold recently. I could be wrong.

  15. @ MarcusOC

    I hope you guys don’t genuinely think Rand and Rockwell (about whom I must admit I never heard of until now) are representative of economic thinking.

    I seem to remember a recent Gurdgiev guest column somewhere recently. The first paragraph was just a lengthy Rand quote.

  16. Great Island is in Co Wexford. Power stations are inside the ETS and in receipt of too many free allowances.

  17. Thanks George!! Out of interest was Great Island sold recently? If so do you know what its future is?

  18. I’m a tillage farmer, I can assure you the tax will hurt, and since there is no viable alternative to diesel in my tractors there is no way for me to reduce my usage. Unless of course I give up, then the wheat I would have produced here will be imported having been grown with non carbon taxed diesel.

  19. @EWI
    There are insults only, but no cause for legal action.

    Writing that someone does not have a PhD when in fact he does, or insinuating that someone was involved in a crime — now that’s actionable.

  20. @ JO’L: You have touched on a very sensitive point. So I will take a diversion around it.

    The ideological concept of Comparative Advantage, which was developed for a partially globalized standard Production-Consumption [PC] economy is completely invalidated when you have a parasitic Finance, Insurance and Real Estate [FIRE] economy sucking the productive surplus out of the PC economy, and substituting virtual credit. The virtual credit immediately metamorphoses into real debt, which acts as a negative surplus on the PC economy. Hence the PC economy has to grow exponentially (since debt grows exponentially) to repay the debt + principle. This is physically impossible.

    Hence the current debt pedicament. It cannot be resolved by injecting additional credit (aka. debt) into the system. Debt has to be defaulted! No option. Just a matter of timing.

    CA mandates that you import what is relatively cheaper – which in a globalized FIRE economy is virtually everything! The actual exporting countries gain something: their productive surplus is (mostly) sucked away also.

    So our economy goes into the slurry pit.

    You may have to grow your own oil-seed crop – without any fertilizer! then extract the oil yourself (or in a co-op). Our current mechanized farming practices (all sectors) are completely un-sustainable. But IFA seem not to notice! Curious that.

    If push comes to shove as regards food supply, then I forsee a complete ban on the importation of anything we could grow here – and damn the protestors – EU, WTO or what have you. Mind you, there will be zero agri subsidies at that point and food costs will be significant. Very unpleasant scenario.

    B Peter

  21. Great Island, along with Tarbert, were sold to the Spanish powergen company Endesa. Both are HFO and near the end of their useful lives, but are attractive sites for new stations.

    Aviation and marine fuels are taxed at zero almost everywhere, and there are international agreements as well as market realities (back-hauling) inhibiting independent action by individual countries.

  22. @ Colm McCarthy,

    Thanks for the info. We will have to wait and see what Endesa have in plan for the future of these sites.

  23. @ Richard Tol

    There are insults only, but no cause for legal action.

    I admire your confidence. I shared a group blog with some legal types a few years back, and that thread would have been ruthlessly pruned for what’s in it. But apparently the people involved with “Irish Economy” are fine with such things (and with being a vehicle for personal vendettas).

    Writing that someone does not have a PhD when in fact he does, or insinuating that someone was involved in a crime — now that’s actionable.

    I believe you know that IT sub-editors decide on the published titles of articles. In fact, I recall that you’ve actually mentioned it in writing in the recent past.

  24. This isnt a productive use of your time
    It it?

    Hey, I’m just passing on advice here, trying to be helpful 🙂

    (Much as RTol did with his associates’ allegations about CRU, but yet curiously hasn’t seen fit to mention that the investigations have cleared CRU. Instead, we’re treated to mud-slinging on behalf of his buddie Lomborg)

  25. @ EWI and any contributors/moderators

    http://en.wikipedia.org/wiki/Troll_(Internet)

    There is an existing post under which to discuss Gibbons’ Lomborg article, another few under which to discuss CRU and finally there is always politics.ie for anything you like. This post is about a carbon tax on some fuels. You’re consistently off-topic and deliberately (imo) inflammatory. This doesn’t enhance or progress discourse, but rather derails it. I’m sure you like to think you’re the ghost at the feast, but really you’re coming across more like a troll.

  26. JO’L / BW

    Are any studies available analyses of farm expenses to show the cost per output breaking it down by energy (diesel expenses) / fertilizer (also very energy dependent) and other inputs?

    An essential green anxiety is that our food is completely energy dependent, that basically we are eating cheap oil and it’s going to run out. The carbon tax is part of the weaning process.

  27. @ fergaloh: You will locate a lot of relevant info at theOildrum.com. You would have to trawl through their archived files.

    ‘High Anxiety’ over food is supplies is very well placed. Problem is not No Oil, but much less oil! Economic downturn in developed world is masking slow decline in crude output (ie. supply). Developing countries are increasing their oil usage! So any ‘twatter’ by commentators in MSM that, ‘recovery-is-just around-the-corner’, is seriously misleading. Either they are complete fools, or complete knaves! Who knows!

    Try these to start with; http://www.oildrum.com

    06/02/’10: Food and Transportation Prices Rising.

    18/03/’10: How do we maintain adequate P and K levels for crops?

    24/04/’10: Reducing fossil Energy Use on the Farm.

    B Peter

  28. @ MarcusOC

    There is an existing post under which to discuss Gibbons’ Lomborg article

    …which, if there where an award for “most likely to be the subject of a court order to discover contributors’ identities”, would win easily. No thanks. And I find it illuminating that you have skipped past umpteen other potential derailments (in this thread alone) so that you could label mine as trolling.

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