Sunday, July 27, 2008

The CAT is out of the bag

I’ve been toying with the idea of a Value Added Tax on embodied carbon, and I’ve been meaning to put some thoughts in writing. So I came up with what I thought was the brilliantly original acronym: CAT for a “Carbon Added Tax”.

Then I did a search, and found that Nobel-laureate Joe Stiglitz recently proposed the same idea:
"A carbon added tax (CAT), levied at each stage of production, would have some of the same advantages that a value added consumption tax has. Each producer would have to show receipts for the carbon tax paid on inputs into its production. The taxes levied at each stage of production would be passed on to consumers. It is as if the tax were imposed on consumers… A carbon value added tax will both discourage production in more carbon intensive ways and discourage the consumption of carbon intensive goods."
His proposal pretty much sums up my thought process…

But perhaps even more interesting is that some one called Ewan O'Leary, registered the URLs for carbonaddedtax.com and .org last February. Now that is some real forward thinking!!! ;-)

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2 Comments:

Anonymous Anonymous said...

In a world where some countries pay for carbon permits/taxes whilst others do not (such as exists now - Kyoto does not require developing countries like China and India to pay for their carbon emissions), a developed country taxing carbon "inputs" throughout a manufacturing process is NOT the same as a country taxing the consumer for the total embodied carbon emissions within a product. Imported product from countries without carbon taxes/pernits cross borders without being taxed, and imposing carbon tarriffs breaches WTO agreements. Environmentally, China and India can keep increasing emissions whilst the developed world has to reduce theirs. This is called carbon leakage and is the big bad (environmeal and economic) problem with Kyoto and probably will ultimately cause Kyoto to fall flat on its face.

What we need is CONSUMER carbon taxes for all embodied carbon in products and services no matter where that product was made - fair for all countries, does not selectively disadvantage manufacturers/jobs in the developed world. Consumers take responsibility for their own consumption habits. Good for the environment. Governments can even take some of this tax money to give rebates to their poorer and financially disadvantaged citizens.

A bit complex to work out the embodied carbon in all products though* - but this may be worth the effort if it creates a better, fairer, and more effective system than Kyoto which is just about dead, even before Poznan. If these issues aren't resolved, then Kyoto will most likley "sink" at Copenhagen.

* Current LCA work throughout the world may be close to producing such data.

December 09, 2008 4:13 AM  
Anonymous Anonymous said...

hello its a nice comment.
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September 23, 2010 4:17 AM  

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