In this regard it makes sense only to claw back the windfall gains from power generators. The rest got to pollute for free, but at least there was no financial gain from it.

This is still a long ways from polluter pays principle but at least with the windfall profit tax, pollution is no longer directly subsidized.

While no one has published work on the actual level of passthrough of ETS permit costs into retail prices for Ireland, there is a regulatory requirement for electricity generators in the all-island market to pass it through; see e.g.

http://www.allislandproject.org/GetAttachment.aspx?id=777ff915-5887-462d-974a-07371acf4402

Presumably the market monitoring unit is checking compliance with these rules, but they tend to publish results only when they have investigated a specific complaint.

A related interesting question is why the windfall tax applies only to electricity generators and not to other ETS participants.

Let the boosters of this find themselves a decent career in fighting corruption?

It seems unlikely to me that Ireland has overtaken the US or other leading countries.

@Carrawaystick
AFAIK the sparks from sparklers are mostly from iron and aluminium, although I’m sure that there can be other metals in there too.

The TDs with the worst attendance records in that period included Willie O’Dea, the former defence minister, who did not visit Leinster House at all, and Jim McDaid, the Donegal TD who is refusing to give up his ministerial pension. He attended only twice during the first nine days covered.”
http://www.timesonline.co.uk/tol/news/world/ireland/article7114114.ece

Yes, Simon Coveney and FG called for the introduction of a windfall carbon tax on the powergen sector in March 2008. See Dáil debate on the issue in June 2008 here (having worked out how to do the web links!).

http://debates.oireachtas.ie/DDebate.aspx?F=DAL20080604.xml&Node=H14#H14

Andrew

Also, using the CITL data on http://www.sandbag.org.uk it appears that ESB (as a group) was a permit buyer in 2008, so unless they got to their verified emissions levels for 2008 through heroic emissions reductions (unlikely) then their only chance to monetize the grandfathered allocation is by passing through the opportunity cost.

@Richard
I know Sijm, Neuhoff and Chen (2006) examined the pass through rates for Germany and Netherlands power generators, but has a similar study been done in Ireland upon which to base the opportunity cost pass through claim? Just because they (power generators) were/are allowed to do it, does that mean it actually happened?

The gift of permits is a capital subsidy which is not considered in the regulated price of electricity.

The price at issue (January 1st, 2010) was about €10/tCO2. I can’t recall the prices in 2009 and 2008.

“Generators have been able to earn a monetary return on these credits, earning excess “windfall” profits at the expense of consumers. ”

http://www.breakingnews.ie/ireland/energy-minister-to-introduce-carbon-windfall-levy-456436.html#ixzz0n3m11wJf

I was being a little too opaque. What was the price at issue? And how does a capital loss (form original grant of economic rights until today) translate into a “windfall profit”

@JeromeK
The French carbon tax was thrown out by the constitutional court because of unfair discrimination between large and small companies within France. The government then tried to spin the story as if it was their decision for the sake of international competition. Apparently, there is at least one person who believed them.

hmmmm…..

And where do you think the electricity generators will get the money to pay the windfall? From their pension funds or their customers?

On balance, I disagree with the Carbon tax, as it is (yet) another tax on enterprise dreamed up by the bureaucrats. On a macro level it just makes us even less competitive against developing countries who are indifferent to threat of AGW. On a micro level it is just another cost to consumers (and taxpayers). In essence it is a regional guilt tax that makes us poorer.

But while the French government have long-fingered it, (”the government said its energy tax was being postponed indefinitely in order not to “damage the competitiveness of French companies”) our green crusaders obviously believe that our economy is in better shape to cope.

I hope they are right.