Guest essay by Eric Worrall
The OECD thinks member governments are not doing enough to impose punitive carbon taxes on citizens.
Governments should make better use of energy taxation to address climate change
14/02/2018 – Taxes are effective at cutting harmful emissions from energy use, but governments could make better use of them. Greater reliance on energy taxation is needed to strengthen efforts to tackle the principal source of both greenhouse gas emissions and air pollution, according to a new OECD report.
Taxing Energy Use 2018 describes patterns of energy taxation in 42 OECD and G20 countries (representing approximately 80% of global energy use), by fuels and sectors over the 2012-2015 period.
New data shows that energy taxes remain poorly aligned with the negative side effects of energy use. Taxes provide only limited incentives to reduce energy use, improve energy efficiency and drive a shift towards less harmful forms of energy. Emissions trading systems, which are not discussed in this publication, but are included in the OECD’s Effective Carbon Rates, are having little impact on this broad picture.
“Comparing taxes between 2012 and 2015 yields a disconcerting result,” said OECD Secretary-General Angel Gurría. “Efforts have been made, or are underway, in several jurisdictions to apply the ‘polluter-pays’ principle, but on the whole progress towards the more effective use of taxes to cut harmful emissions is slow and piecemeal. Governments should do more and better.”
In 2015, outside of road transport, 81% of emissions were untaxed, according to the report. Tax rates were below the low-end estimate of climate costs (EUR 30/tCO2) for 97% of emissions.
Meaningful tax rate increases have largely been limited to the road sector. Fuel tax reforms in some large low-to-middle income economies have increased the share of emissions taxed above climate costs from 46% in 2012 to 50% in 2015. Encouragingly, some countries are removing lower tax rates on diesel compared to gasoline. However, fuel tax rates remain well below the levels needed to cover non-climate external costs in nearly all countries.
Coal, characterised by high levels of harmful emissions and accounting for almost half of carbon emissions from energy use in the 42 countries, is taxed at the lowest rates or fully untaxed in almost all countries.
While the intense debate on carbon taxation has sparked action in some countries, actual carbon tax rates remain low. Carbon tax coverage increased from 1% to 6% in 2015, but carbon taxes reflect climate costs for just 0.3% of emissions. Excise taxes dominate overall tax rates by far.
“The damage to climate and air quality resulting from fossil fuel combustion can be contained, but the longer action is delayed the more difficult and expensive it becomes to tackle this challenge,” Mr Gurria said. “Aligning energy prices with the costs of climate change and air pollution is a core element of cost-effective policy, and vast improvements are urgently needed. While in some cases compensation for higher energy costs faced by households or firms may be deemed necessary, especially to those more vulnerable, lower tax rates or exemptions are not the way to provide it – targeted transfers should be favoured.”
Further information on Taxing Energy Use, including graphical profiles of energy use and taxation in the 42 countries is available at: http://oe.cd/TEU2018.
An embeddable version of the report is available, together with information about downloadable and print versions of the report.
Register for a 16:00 GMT (11:00 EST) webinar where OECD economists will present Taxing Energy Use and answer questions.
For more information, journalists should contact the OECD’s Centre for Tax Policy and Administration or the OECD Media Office (+33 1 45 24 97 00).
Working with over 100 countries, the OECD is a global policy forum that promotes policies to improve the economic and social well-being of people around the world.
The OECD was originally set up to administer the US financed Marshall Plan, the post WW2 reconstruction of Western Europe. The transnational OECD bureaucrats somehow managed to perpetuate their jobs beyond the completion of the Marshall Plan in 1951, and now take credit for US post war growth.
From the OECD website;
… The Organisation for European Economic Cooperation (OEEC) was established in 1948 to run the US-financed Marshall Plan for reconstruction of a continent ravaged by war. By making individual governments recognise the interdependence of their economies, it paved the way for a new era of cooperation that was to change the face of Europe. Encouraged by its success and the prospect of carrying its work forward on a global stage, Canada and the US joined OEEC members in signing the new OECD Convention on 14 December 1960. The Organisation for Economic Co-operation and Development (OECD) was officially born on 30 September 1961, when the Convention entered into force.
Other countries joined in, starting with Japan in 1964. Today, 35 OECD member countries worldwide regularly turn to one another to identify problems, discuss and analyse them, and promote policies to solve them. The track record is striking. The US has seen its national wealth almost triple in the five decades since the OECD was created, calculated in terms of gross domestic product per head of population. Other OECD countries have seen similar, and in some cases even more spectacular, progress.
So, too, have countries that a few decades ago were still only minor players on the world stage. Brazil, India and the People’s Republic of China have emerged as new economic giants. The three of them, with Indonesia and South Africa, are Key Partners of the Organisation and contribute to its work in a sustained and comprehensive manner. Together with them, the OECD brings around its table 39 countries that account for 80% of world trade and investment, giving it a pivotal role in addressing the challenges facing the world economy. …
Read more: http://www.oecd.org/about/history/
Why hasn’t the OECD been decommissioned? Sixty seven years since the official end of the Marshall Plan has surely been enough time to tie up any loose ends. Its not like we’ve got a global shortage of well funded transnational bureaucrats offering obnoxious, out of touch advice on imposing climate taxes.
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Guest essay by Eric Worrall
Thank you for this posting. It is more of a revelation than an essay. Left me with that “whiter shade of pale’ feeling.
Mission creep within the OECD would be, to put it lightly, an understatement. Goals and cooperation needed in 1961 were far different than today and it seems the OECD has passed its expiration date. With a budget of $442 million (USD in 2017) and mission creep it has exceeded or paralleled the EPA (US) grab for power and control far beyond its intended charter. Like and old car maybe it’s time to just junk it and get a new one. Not much hope in recycling the existing parts. Best start from scratch or the same old parts (personnel, ideals and agendas) will limit present/future value and function.
To a manipulative bureaucrat, any ‘crisis, real or manufactured, is an excuse to raise taxes.
Create a false ‘crisis’…
Use the ‘crisis’ to scare the masses….
Raise taxes to ‘address the current crisis’…..
A classic example of manufacturing a false crisis: “Oh We Got Trouble…….”
The Music Man
https://youtu.be/LI_Oe-jtgdI
LOL
That’s the way it seems to work.
Yes, double them in the EU member states and start collecting them in the Middle East and Venezuela.
…and double them in Canada also.
I don’t like to see energy being wasted, such as a large office block with every light burning brightly, long after all the employees have gone home. Having said that, energy should be as low cost as possible, since it enables countries to improve the living conditions of even the poorest citizens.
The OECD should understand this more than most. It is therefore especially disappointing that the Organisation for Economic Collapse and Decline should call for higher energy taxes which will be a setback for every developed nation and a disaster for the less developed ones.
It is even more ridiculous that the OECD should advocate higher taxes to fight an imagined threat based on climate ignorance and exaggerating models.
The LEED building mantra was based on “seeing” rather than fact checking the energy utility bills of those building designs. The cost of lighting (LEDs) fell while the utility bills for these see through glass buildings went up dramatically for heating and cooling. I guess R value does matter in the end.
The cost of heating went up, but not by as much as the cost of lighting went down.
On the other hand the cost of cooling went down as the cost of lighting went down.
A lot depends on how much of the year you spend heating your home.
BTW, most office buildings are still having to run the AC when the outside temperatures are getting down below 50F. That much heat is being generated inside.
OECD was captured by the contemporary socialists already several decades ago. Sorry, it’s BS organization.
+1
The reality is that, based on the paleoclimate record and the work done with modeling, the climate change we have been experiencing is caused by the sun and the oceans over which mankind has no control. There is no real evidence that CO2 has any effect on climate and plenty of scientific rational to support the idea that the climate sensivity of CO2 is zero. For those that believe in a radiant greenhouse effect, by far the radiant greenhouse effect is caused by H2O and not CO2 yet nothing is being done to reduce the amount of H2O in our atmosphere. The biggest source of H2O polution are the oceans and nothing is being done to prevent evaporation of H2O from the oceans into the atmosphere. Even if we could eliminate all CO2 from the Earth’s atmosphere and with hence eliminate life as we know it on this planet, the effort woud have no effect on climate change.
The AGW conjecture is based upon the existance of a radiant greenhouse effect caused by trace gases in the Earth’s atmosphere with LWIR absorption bands. But the reality is that a radiant greenhouse effect has not been observed in a real greenhouse, in the Earth’s atmosphere, or anywhere else in the solar system. The radiant greenhouse effect is science fiction as is the AGW conjecture. The idea that so called carbon taxes will help to improve the Earth’s climate, is science fiction. Even if we could somehow stop the climate from changing, extreme weather events are part of our current climate and would continue unabated. There are many good reasons to be conserving on the use of fossil fuels, but climate change is not one of them.
I have seen several reports claiming the Trump administration is preparing to call for a $0.25 tax on gasoline, supposedly as one way to finance the new Trump infrastructure plan.
Don’t do it, President Trump!!!
Gasoline taxes hit the poorest members of society the hardest. As an example, Increasing the price of a gallon of gasoline by $0.80 *reduces* U.S. GDP by One percent. Which is a LOT of money.
Don’t do it!
I don’t know if Trump personally proposed this tax increase. I tend to believe that it was introduced by someone else.
Regardless of who is pushing this idea, if it actually shows up in a Trump Infrastructure bill, I will be writing to all my congressional representatives requesting that they vote against it. A gasoline tax is one of the worst ideas evah!
The Oklahoma legislature just tried to raise a bunch of taxes this week, including a gasoline tax. The bill went down in flames.
I think whoever promotes a federal gasoline tax increase is going to get a LOT of pushback.
It will be interesting to see whether Trump goes along with it or not.
So, where do you think the money should come from – the already-battered budget? I think Trump may have painted himself into a corner on this one. Our infrastructure is in bad shape, and the money to fix it has to come from someplace.
Well … ‘infrastructure’ has become a ‘game’, like Education or Immigration.
Lots of it is properly the responsibility of lower, local levels of government. Not the Fed. Or the OECD.
The classic ol’ hurricane-zone local-level infrastructure scam is to deliberately not do upkeep & maintenance on local powerlines, because we’ll get another hurricane one of these days, and then the Fed will roll in & build us a whole new system.
The Fed have purview over ‘interstate’ highways … because locals back-when ‘put on an act’, purposefully to manipulate the Feb & the Process, during freeway-route planning & development. Ero, the Fed owns a stake in so-independent Montana. And actually, a bigger-than-usual stake.
The way things are now going ‘all of a sudden’, the minimal public awareness of ‘infrastructure-scamming’ is likely to find itself on a dunce-stool alongside better-known gamey gamers gaming the game.
In some cases, yes, we want to ‘invest’ for some things, in some places. But no, we don’t want sly locals sitting up late with a jug of wine dreaming up ways to tap the Fed budget. Or to validate the OECD.
Local Power – written clearly into the Constitution – cuts both ways folks. Lower levels below the Fed hold Power … but that also comes with Responsibilities … the game often & progressively becoming, for ‘the poor locals’ to dodge their $ onerous side of the social equation.
It becomes, eg, a societal-level version of ‘learned helplessness’.
The OECD has no proof that CO2 has any effect on the Climate, and has no proof that increasing taxes will have any effect other than damaging the lives of the poor in the World, but this does not stop their deranged brains urging them to call for increased taxes of CO2 production. The OECD and the UN should be closed down, as they have long since passed their use-by date.
“Taxes are effective at cutting … emissions …”
A tax transfers money from the private to the public sector. Is there any evidence to support the assertion that emissions will be lower if the public share of national expenditure is increased?
The OECD in my experience is a sock-puppet for socialists who first write an OECD report, and then react to it as it was given from above. In its simplest form, some statistics are sent to the OECD that publishes them in shaming light, and this is used to drive legislation that has little to do with the statistics, and the statistics have little to do with facts.
In little countries in Europe (like, almost anywhere in Europe) this works stunningly well.
How to fix this for Europe?
There’s no fix as long as Europeans vote only for socialists of different shades. Note that there are no small state conservatives nor extreme right conservatives in Europe. Even most populists are center-left if not mixed with extreme left.
The main purpose of carbon taxes is to kill off the poor and elderly .It is sheer human arrogance and deceit
to claim we are going to somehow shape the earths climate to some committee’s liking .
The UN is assuring it’s demise by meddling and trying to rob citizens in the west to further the globalist agenda .
No, leftist kill the poor and the elderly because they think so much their children.
They’re nothing but a bunch murdering genocidal killers.
The EU hasn’t raised carbon taxes because they are afraid (and rightly so) that their industries would move to the second or third world, or even worse, to the United States. Same problem with any other energy tax scheme.
If everybody is entitled to the same share of fuel, water and energy, then they are also entitled to their share of weather, especially Canadian winters.
Here in the U.K., in rough figures, The cost of wind energy is about 4 times that of the current market cost. This being due to the government subsidy policy which is a stealth tax, being paid by the consumer.
To me this is an inordinately high motivation/ coercion mechanism which will create endemic poverty and achieve little else.
To argue that this is insufficient and should be increased is grossly irresponsible.
All – Been a while since I posted, but have been reading WUWT diligently. Here in the Once-Great State of Washington USofA, there have been no less than 10 bills in the local State Legislative sessions the last two years concerning the taxation of Carbon Dioxide. Most have died in session but two have made it out of committee and will soon reach the floor for votes: SB 6335 and SSB 6203 (Here: http://app.leg.wa.gov/billsummary?BillNumber=6335&Year=2017 & http://app.leg.wa.gov/billsummary?BillNumber=6203&Year=2017). I have posted numerous times regarding various CO2 taxation bills here at WUWT and at the local government website. A few weeks ago, I repeated my submission (which is limited to a small number of characters at the website). So, I decided to email my legislators directly with the following:
=====
Should this bill be enacted: What is the plan when scientific evidence proves that carbon dioxide is not the driver of catastrophic climate change? The science is not settled on this point, and enacting such punitive taxation based upon non-conclusive evidence (in fact there is no evidence of anomalous climate catastrophe in the observable weather record – such catastrophe exists in model projections only) is disingenuous and not in the best service of the constituency of the State of Washington. Washington’s output of Carbon Dioxide to the overall globe is miniscule, and these rules will merely be punitive to industry and more importantly each individual user of any and all fuels purchased in the State.
GOV Inslee’s UW Research Found Lacking for Human-Caused CO2 Attribution
Recently, I have reviewed the back-up documentation presented by GOV Jay Inslee that purports to substantiate the need for such taxation (https://www.governor.wa.gov/issues/issues/energy-environment; https://environment.uw.edu/research/major-initiatives/ocean-acidification/washington-ocean-acidification-center/) and have found the initial attribution of increased global atmospheric CO2 is based solely upon the finding documented by the Intergovernmental Panel on Climate Change (IPCC). Recently, the IPCC has back-tracked on their dire prediction for future carbon-dioxide caused ‘global temperature increase’, as real-world observations have not tracked with IPCC temperature projections (see: https://www.ipcc.ch/publications_and_data/ar4/wg1/en/spmsspm-projections-of.html; https://judithcurry.com/2015/12/17/climate-models-versus-climate-reality/, https://wattsupwiththat.com/2014/01/01/ipcc-silently-slashes-its-global-warming-predictions-in-the-ar5-final-draft/, and: https://www.washingtonpost.com/news/capital-weather-gang/wp/2014/09/26/study-lowers-range-for-future-global-warming-but-does-it-matter/?utm_term=.a18d4d31fde8; http://www.foxnews.com/science/2018/01/23/catastrophic-global-warming-less-likely-study-says.html).
Of note is the ambiguity in the UW research in this area, in a footnote found in the document found in the above appended URL and titled:
“Ocean Acidification in Pacific Northwest coastal waters: what do we know?” which concludes:
“28. Published summaries of datasets from diverse national and global locations have shown substantial differences in the variation of pH or CO2 concentration of marine waters (Hoffmann et al 2011 (see below
for full reference); Waldbusser and Salisbury, 2013). What is equally clear in Washington coastal waters is that ocean acidification differs between locations in ways that reflect local drivers. Data collected at regional scales reveal substantial spatial and temporal variability (Scientific Summary on Ocean Acidification, 2012). Over time, we see seasonal and daily variations in pH and aragonite saturation state, hence a single value does not and cannot describe the ocean acidification status of a system. Diurnal changes in production and respiration, tidal intrusions interacting with river plumes, and seasonality in phytoplankton growth and respiration processes all contribute to the ocean acidification signal, and all vary over different scales of time and space.”
Talk about ‘settled science’. Looks like local conditions of tides, upwelling, and the seasons have a greater influence on ‘ocean acidification’ than atmospheric carbon dioxide?? This is the Governor’s reasoning to impose huge amounts of taxation on fuels purchased in the State?
To conclude, to stumble into punitive and regressive taxation by placing a ‘YES’ vote for SB 6335, 6203 based upon inconclusive, partial scientific evidence is not what a member of our State Senate should like to see as part of their life’s legacy, looking back over a lifetime from that eventual rocking chair on the front porch. The attributions for causation are correlated but causation is not conclusively restricted to man-produced atmospheric carbon dioxide releases from a modern lifestyle. Please, consider a ‘NAY’ or ‘NO’ vote for SB 6335, 6203, or for any other future attempt to create revenue from a beneficial and from all scientific evidence, relatively innocuous trace gas. We have elected and placed our trust in you to weigh the evidence and vote on our behalf. Please, consider what you are about to asked to do, and to vote “No” for any and all Carbon Dioxide Taxation measures.
Thanks,
Mike Roberts
======
Boy, did I ever create a response. I was asked via return email to submit a contact phone number, and after doing so I received a direct personal phone call from one of my districts’ State Senators. We spoke for over 40 minutes. He assured me that they were doing all they could to prevent these bills from passing; as the the legislature is now in a Democratic majority, they will be relying on Democrat reps voting against the measures because they represent Republican-majority districts, so as to remain re-electable. He also warned me that, should the legislature not pass the carbon dioxide tax bills, there exists strong, outside influences to create an ‘astro-turf’ initiative to present a much more punitive and restrictive version of a CO2 tax directly to citizens for a vote. That potential was a much greater threat in his opinion; what he said was needed was a way to contact the 19 – 30 voting age group, and present them with facts in an attempt to persuade them that CO2 taxes were not a benefit, but a net negative.
I’ve written enough for now; I’ll keep you all posted regarding any future developments.
Yours in WUWT,
MCR
[Thank you for your reply, for your efforts. .mod]
I’m an Oregon guy, but the same thing is going on here, and let me add my thanks for your efforts as well.