Author: Richard Tol

John Gibbons calls for nuclear power in Ireland in today’s Irish Times.

There are all sorts of issues with nuclear power. In the medium term, nuclear power cannot expand much because of constraints on manufacturing capacity (particularly of vessels) and on the number of nuclear engineers. More generally, the big issue with nuclear power is neither waste nor security (both of which are largely under control if you employ qualified people), but proliferation. As there are more nuclear power stations and more nuclear engineers, chances rise that nasty people will get their hands on a dirty bomb or worse.

Nuclear power is irrelevant for Ireland. Nuclear power provides baseload. The current baseload power station, MoneyPoint, will retire before 2025. You cannot plan, permit and build a nuclear power station in less than 15 years. The next opportunity for nuclear in Ireland is when MoneyPoint’s successor will retire, around 2065.

Besides, nuclear and wind power do not mix well, because the amount of wind that Ireland is committed to requires a power plant that is more flexible than nuclear can be.

John Bruton has a peculiar piece in the Irish Times of last Saturday. He argues that there are so many externalities between nation states that countries should grant their sovereignty to a “new system for global decision making”. Bruton puts climate change forward as his main argument.

Bruton makes two factual mistakes: “The failure of world leaders to come up with a meaningful and binding agreement on climate change at the long-planned meeting in Copenhagen means that the binding, if incompletely applied, agreement in the Kyoto protocol will now expire and will not be replaced in time, if ever.” The targets in the Kyoto Protocol will expire in 2012, and the rest of the Kyoto Protocol has no sunset clause. There are three more major international meetings scheduled before the Kyoto Protocol expires, in 2010 (Mexico City), 2011 (Johannesburg) and 2012 (location to be decided).

He also write that “many in the US Senate are still wedded to the idea that international rules should not bind the United States and should never override US law.” Once ratified, an international treaty is binding in US law, and it is exactly because of this that the US is so reluctant to ratify international treaties. EU countries happily sign up because rules will be ignored if inconvenient — the “growth and stability pact” of the monetary union being a prominent example.

The main flaw in Bruton’s analysis, however, is the apparent assumption that, if the USA and China were to give up their sovereignty over their energy, transport, industrial and agricultural policies, they would follow the European aspirations for a low carbon economy.

If the “new system for global decision making” would be in any way democratic, chances are that Europe would be forced to abandon its visionary climate policy and focus on things that matter now to the majority of the world population, such as clean water, enough to eat, and freedom from infectious disease.

It is our sovereignty that allows our pretensions as planetary saviours.

The carbon tax was ruled to be in conflict with the constitution of France. The proposed French carbon tax is very similar to the Irish carbon tax (but 2 euro higher). The stated reason (IN THE GUARDIAN) is that emissions already regulated under the EU ETS would be exempt from the carbon tax. This is exactly as it should be. Anything else would be double regulation. In fact, as I argue here, a domestic tax on an internationally traded permit would not reduce total EU emissions (it would reduce French emissions and increase emissions elsewhere in the EU) but it would increase costs in France and the EU as a whole.

[DELETE: A bad decision, so.]

This may well have ramifications for EU climate policy, probably in the form of a renewed call for an EU wide carbon tax.

ADDITIONs: translated press release, original press release by the Constitutional Court

The court’s decision seems to rest not so much on the fact that some will pay taxes and others need permits, but rather that the permits are given away for free. The court did not rule in favour of double regulation, but against grandparenting for some.

FURTHER ADDITION:

Courtesy of Sarah Parlane, a new translation

Press release
Decision n° 2009-599 DC – December 29, 2009.
Finance Act for 2010.

On December 29, 2009, the Constitutional Council, by its decision n ° 2009-599 DC, ruled on the Finance Act 2010 which had been seized by over sixty members and over sixty senators. Applicants challenged the reform of the business tax which will be substituted by a territorial economic contribution. They also challenged some propositions relative to the carbon tax plan, the per diem work injury, the increase of the
domestic consumption tax for fuels and the extension of the active solidarity income to some young people under twenty-five years.

[…]

Secondly, the Council found that, in relation to the carbon tax, the broadly applicable authorized exemptions were contrary to the objective of reducing global warming and generated some “tax discrimination” in relation to public contributions. As a result it has censored the whole policy regime relative to the carbon tax (articles 7, 9 and 10).

II – Contribution carbon.
Article 7 of the law introduced a carbon tax. The parliamentary analysis outlined that the objective of this measure is to introduce a mechanism capable of reducing greenhouse gas emissions significantly in order to reduce global warming. To achieve this, it advocated “to impose an additional tax on fossil energy consumption” to induce businesses, households and governmental agencies to reduce their emissions.

However, Articles 7 and 10 of the Act also stipulated some exemptions, discounts, partial refunds and specific rates. According to these, the following emissions were not subject to the carbon tax:
– those of the thermal generating plants producing electricity,
– those of the 1018 most polluting industries such as refineries, cement producers, coke and glass factories,
– those of chemical industries relying heavily on energy,
– those of double-use products,
– those of energetic products used in electricity consumption,
– those of air and public transportations.
Furthermore, a discounted rate applies to the emissions issued from agricultural production, fishing, road freight and shipping.