AEBIOM
INDUSTRY NEWS
Low oil price provides window of opportunity
Material supplied by Anamaria Olaru, Communications & Events Manager of the European Biomass Association E-mail:
olaru@aebiom.org
Association, there has rarely been such an opportunity for the global community to take action against fossil carbon emissions and global warming as there is in 2015. The North Sea Brent oil price has plummeted from $110 per barrel last Summer to around $50 in February, a fall of more than half, which will dramatically affect energy markets. All users of oil products at market prices around the world will now perceive their diesel, petrol and fuel oil as cheap.
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This gives us a unique opportunity to introduce and raise fees and taxes on carbon dioxide emissions in certain non-ETS sectors* in all countries while keeping it painless for
ccording to Gustav Melin (below), President of the European Biomass
citizens. The best strategy would, of course, be to agree on a minimum carbon emission fee in the framework of UN climate negotiations, but it is difficult to reach consensus by negotiation between so many countries. Therefore, every government should consider urgently acting on its own, not waiting for global agreement.
On the one hand, countries that already have carbon fees or taxes should take the opportunity to raise these. As an example, in Sweden, petrol and diesel prices have decreased by over 2 SEK per litre (20 Euro Cents) and there is a clear opportunity to raise fuel duty by up to half that amount, without much consumer reaction. The situation is similar in all European countries, where many urgently need to strengthen their state budgets by increasing
revenues. Higher carbon fees, duties or a tax is one way to do it. On the other hand, countries with no fees or taxes on carbon emissions should introduce such measures now, both on fossil transport fuels and on fossil fuels for heating. They can introduce such taxes at a lower level, but with the current drastic fall in oil prices, even relatively high carbon dioxide fees may be accepted by consumers. The important thing is to act now, before oil prices climb again.
There is convincing research showing that carbon emission fees are the most efficient general method to combat climate change. Here are the main reasons why carbon fees are so efficient:
Carbon dioxide fees raise the price of fossil emissions and thereby penalise fossil fuels for their negative effects on the climate. Consequently, carbon dioxide fees also favour renewables and energy efficiency. Carbon dioxide fees are fair and logical because they are proportional to the actual emissions. Increased costs on emissions thus help individuals and enterprises to make better decisions for our common future. They can calculate new profitable investments or change behaviour to improve their economy, e.g. buy a more efficient car, insulate
4 Spring 2015 4
Carbon dioxide fees do not reduce economic growth. They change the profitability balance between different energy sources and carriers, creating new opportunities for investments in energy efficiency and renewable energy, with less need for subsidies.
the house, take the bike instead of the car or use public transport. Businesses can develop new products that can be competitive on a market where more efficient products are in demand, etc. Government may choose to use part of the revenues from the carbon tax to support poor people who have relatively higher energy bills through helping them to finance investments in clean technologies. In order to limit the impacts on citizens, Governments can choose to use the income from the fees for other
investments, e.g. in infrastructure
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