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Environmental Fiscal Reform in South Africa

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1 Environmental Fiscal Reform in South Africa

2 OUTLINE Introduction Overview of the Environmental Fiscal Reform Policy Paper, April 2006 Public comments on the EFR policy paper 2009/10 tax proposals Carbon tax and / or Cap-and-Trade

3 INTRODUCTION High (er) levels of economic growth must be sustained to facilitate significant reductions in the levels of unemployment, poverty and income inequality. The National Framework for Sustainable development has identified the following areas that require action: Excessive resource use for energy generation; Rising waste levels; Soil degradation; Poor local air quality; and Water scarcity and quality concerns. It’s not just the quantity of growth that matters but also quality, and incorporating sustainable development considerations in policy development and decision making is actively being pursued. The role of market-based instruments particularly environmentally-related taxes to complement regulatory measures is being explored.

SA generates 90 per cent of electricity from coal - sufficient low cost coal supplies and historical excess electricity generation capacity manifests itself in low electricity prices and a highly energy intensive economy. Coal-based electricity responsible for bulk of GHG emissions in South Africa. SA ranks in the top 20 highest GHG emitters in the world and is the largest emitter in Africa, accounting for 42 per cent of continent’s carbon emissions. Energy pricing in SA – can we begin to partially internalise externalities to facilitate a more efficient allocation of resources that would not compromise economic growth, and promote social and environmental benefits?

In an address in 2007 to the Curtin Public Policy Forum the secretary of the Treasury in Australia, Ken Henry, listed eight medium-term challenges that economic policy advisers (in Australia) should be thinking about, these include inter alia: “increasingly challenging issues in the inter-relationship between energy, climate change and water; and some deeply entrenched failures in environmental management, including loss of biodiversity, partly due a history of exploitation of the ‘commons’ ”. He argues that: “Market mechanisms will have to be used to do more, not less, of the allocation task, but with more attention paid to the role of government in defining property rights, pricing for externalities, and representing the interests of future generations”.

Provide incentives (stick and carrot) to redirect research, development and investment away from fossil fuels that are currently more difficult to extract towards low-carbon energy resources. Low resource costs of the remaining stock of fossil fuels have to be factored into climate change policy. There is a significant element of rent in the current prices of exhaustible fossil-fuel resources, particularly oil and natural gas. Fossil-fuel prices could fall in response to the strengthening of climate-change policy, partially undermining the effectiveness of such interventions.

Carbon pricing is essential for climate change policy. Pricing carbon via taxes, tradable permits or regulation means that people bear the full social costs of their actions. Encourages firms and households to shift away from high carbon goods and services and to invest in low-carbon alternatives. However, range of other market failures and barriers means that carbon pricing alone is not enough. Technology policy is vital to bring forward the range of low carbon and high efficiency technologies to reduce emissions Policies on regulations, information and financing are also important.

Environmental fiscal reform refers to the interface between environmental and fiscal policy measures. An opportunity exists to undertake reforms to existing MBIs and develop new environmental tax instruments to achieve environmental goals. The Environmental Fiscal Reform Policy Paper provides the foundation to build on and support other environmentally related initiatives in South Africa.

Maintenance of a coherent tax policy framework; Development of a coherent process and framework to consider and evaluate environmental taxes; and Consider both environmental and revenue outcomes and the “double-dividend” hypothesis.

10 INTERVENTION OPTIONS Command-and-control measures:
Use of legislative or administrative regulations that prescribe certain outcomes; Usually target outputs or quantity, e.g. minimum ambient air quality standards, within which business must operate. Market-based instruments: Policy instruments that attempt to internalise environmental externalities through the market by altering relative prices that consumers and firms face; Utilise the price mechanism and complement command-and-control measures. Under certain circumstances MBIs are considered more efficient than command-and-control measures.

The OECD definition of an environmentally related tax has been adopted: “a tax whose tax base is a physical unit (or proxy of it) that has a proven specific negative impact on the environment” Although the definition does not make reference to the intent of the tax, intent is important but should not be used for classification purposes; The paper distinguishes between taxes and user charges, however the difference is not always clear cut in practice.

No direct benefits accrue to individuals in exchange for payment. A marketable service is provided to identifiable beneficiaries. Payments are enforced in terms of legislation. Direct and proportional benefits accrue to beneficiaries in exchange for payments. Governments or organs of state direct the use of revenues. Transactions take place in a willing buyer willing seller market.

Environmental effectiveness – linked to the environmental externality and aim for best design possible; Tax revenue – level of revenues and revenue use; Support for the tax – public support and acceptance is important (e.g. tax payer morality); Legal, technical & administrative feasibility: Define taxable commodity - tax base; or nature of incentive; Setting the tax rate; Tax avoidance and evasion; Collection costs; and Compliance costs. Legislative / international aspects – implications need to be considered (also WTO, SADC); Competitiveness impacts – tax incidence is critical. May require adoption of mitigating measures; Distributional impacts – mitigation and compensation measures may need to be considered; and Adjoining policy areas – is the instrument capable of contributing to other social and economic objectives?

Internalising negative externalities comes at a price. Aims to internalise externalities to a socially optimal level cannot be achieved overnight. There are “win-win” cases where more environmentally informed business practices could lead to corresponding improvements in competitiveness. Improved environmental performance may also improve access to certain markets – notably in the export sectors. However, these benefits are not immediately possible in all cases. A phased approach taking account of potential impacts on competitiveness must be adopted to give specific sectors time to adjust.

The poor and low-income groups are often hardest hit by negative environmental externalities. Important for environmentally-related fiscal policy to ensure that environmental instruments are pro-poor where possible, or at least do not place a disproportionate burden on low-income groups. A sustainable growth path should provide protection and support to the poor. Development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Tradeoffs to be well managed.

Double dividend-hypothesis An improvement in environmental quality is secured (the first dividend) Gains in economic efficiency and employment could be realised (the second dividend). Tax shifting (e.g. reduce payroll taxes) can effectively minimise the overall tax burden on affected sectors and still create required behavioural incentives.

17 EARMARKING For many stakeholders, there is a link between revenues from environmentally-related taxes and spending on the environment. The policy paper tries to maintain a clear separation of revenue and expenditure sides of the budget. In general, “full” earmarking is not in line with sound fiscal management practices. However, there is a need to consider different incentive options (many of which include revenue recycling in some shape or form – e.g. “soft” earmarking – plastic bag levy).

18 KEY MESSAGES Market-based instruments (e.g. environmentally-related taxes, charges and incentives) can complement and reinforce environmentally related regulatory measures and at the same time contribute towards fiscal objectives; A framework is proposed to consider and evaluate the use of market-based instruments; The development of environmentally-related tax and incentive proposals should, as far as possible, be adequately integrated into a coherent fiscal policy agenda;

19 KEY MESSAGES (cont) The ‘full” earmarking revenues from environmentally-related taxes is not in line with sound fiscal management practices. However, incentives and the “soft” earmarking of tax revenues, where appropriate, could be considered; and Special attention should be given to the possible distributional and competitiveness implications of environmental taxes and charges. The appropriate design and phasing-in of such taxes could deal with these two important aspects.

20 COMMENTS RECEIVED Botanical Society of SA Business Unity SA
Cape Nature Chamber of Mines DEAT DME DWAF Edward Nathan Energy Intensive User Group Eskom eThekwini Municipality Esemvelo KZN Wildlife Fiscal and Financial Commission Forestry South Africa Game Rangers Association of SA Heron ISES International Monetary Fund 19. Institute for Zero-Waste in Africa 20. Mintek 21. Mulholland 22. NAAMSA 23. Packaging Council of SA 24. Paper Manufacturing Association of SA 25. Responsible Container Management Association of SA 26. S.A National Biodiversity Institute 27. Sustainable Energy South Africa 28. World Wide Fund for Nature 29. Meakin and Company 30. University of Pretoria 31. Wildlife and Environment Society of SA

The polluter-pays-principle, which states that those responsible for negative environmental externalities should bear the costs of internalising those externalities, underpins most of the interventions proposed in the policy paper. Some organisations also recommended the application of the provider gets principle where providers of public goods are rewarded. This could take the form of positive incentives (e.g. subsidies or tax relief) to promote environmentally beneficial activities. Although the policy paper does elaborate on the potential role that “positive” fiscal incentives could play in achieving environmental outcomes, the need for and role of such (positive) incentives will be considered.

SECTOR LEVY (charge) TAX RATE Transport fuels General Fuel Levy 150 cent per litre (petrol). 135 cent per litre (diesel). cent per litre (biodiesel). Road Accident Fund Levy 64 cent per litre. Equalisation Fund Levy Currently zero Customs and Excise Levy 4 cents per litre Vehicle taxation Ad Valorem Customs & Excise Duty (X), CO2 component (Y) (X) graduated rate based on the vehicle price with an upper ceiling of 20% Plus (Y) graduated rate based on CO2 emissions. Vehicle Licensing Fees Fees vary between different provinces – usually based on weight. Aviation taxes Aviation Fuel Levy 1,5 cents per litre on all fuel sales excluding foreign operators. Airport charges Charges imposed to fund the operation of the South Africa Civil Aviation Authority (SACAA). Air Passenger Departure Tax R150 per passenger - international; R80 per passenger to BLNS countries. Product taxes Plastic shopping bags levy 4 cents per bag 1 to 3 cents per watt (R3 per light bulb) Electricity NER Electricity Levy A levy per kWh is implemented on all electricity generated to fund the National Electricity Regulator. Tax on electricity production – non renewable resources 2 cents per kWh as from 1 July 2009 Water supply Water Resource Management Charge Charge rates vary according to different users. The aim is to recover costs associated with water supply and abstraction. Water resource development and use of water works charge Charge rates vary according to different users. The charges aim to recover the costs associated with the construction, operation and maintenance of water schemes. Water Research Fund Levy This levy earmarked to fund the operations of the Water Research Commission. Waste water Waste Water Discharge Charge System (proposed) The WDCS is in the process of being developed. 3 components are proposed for the system. 2 are cost recovery based charge and the third a levy/ tax on waste effluent. Incandescent light bulbs

General Fuel Levy Petrol Diesel Biodiesel Motor Vehicle Taxes and Fees Excise duty – relatively low currently and based on the value of a vehicle. Reforms to incorporate environmental criteria such as CO2 emissions, engine size and / or energy efficiency. Vehicle licencing fees Solid Waste Management – promoting the idea of the waste management hierarchy. Possible instruments include: Product taxes (plastic bags levy, incandescent light bulbs, etc.) Deposit refund schemes (glass bottles, tyres?) Disposal taxes (landfill charges and / or taxes?)

Electricity Electricity consumption tax; and/or Fossil fuel input tax. Water supply and use – tax instruments probably less appropriate than alternative allocative instruments such appropriate pricing and / or tradable permits; Waste water – DWAF has already taken the initiative in this area and is in the process of developing the Waste Water Discharge Charge System (WDCS); Air Quality Act Includes penalties or non-compliance fees. Waste Bill

25 Tax policy objectives for 2009/10
Environmental Fiscal Reform MBI to support environmental objectives / initiatives Change behaviour – encourage energy efficiency and a less carbon intensive economy Boosting household confidence, via PIT relief Fiscal drag and real tax relief, change in brackets, primary rebate and some thresholds Support private sector investment Delay in implementation of the Mineral and Petroleum Resources Royalty Act (2008) until 2010 Industrial policy tax incentives announced last year to be implemented in 2009 Raising sufficient revenue as economy slows down

26 Emission charges and taxes: taking forward our 2008 announcements
SA is a significant Green House Gas (GHG) emitter Coal combustions account for more than 40 per cent of carbon emissions Recent reports the Economics of Climate Change emphasized the use of appropriate market-based instruments (charges, taxes, tradable permits and incentives) to support and complement regulatory measures to address concerns wrt to emissions in general and climate change in particular The National Treasury will in consultation with DEAT and other stakeholders further investigate specific instruments to address concerns about both climate change local air pollution The electricity levy should be viewed as a first step in this direction Reforms to the ad valorem excise duty on motor vehicles to include environmental criteria such as engine capacity, fuel efficiency and level of emissions will be considered

27 Environmental Fiscal Reform (1)
(1) Incentives for cleaner production – energy efficiency It is proposed that investments in energy-efficient equipment should qualify for an additional allowance of up to 15 per cent on condition that there is documentary proof of the resulting energy efficiencies, certified by the Energy Efficiency Agency. (2) Certified emission reductions to receive favourable tax treatment The clean development mechanism established in terms of the Kyoto Protocol allows for certified emission reductions (CERs) to be issued to recognise progress in reducing the release of greenhouse gases into the atmosphere. There is, however, uncertainty with regard to the income tax treatment of CERs, which could be one reason for the slow take-up of such projects in South Africa. It is proposed that income derived from the disposal of primary CERs be tax–exempt or subject to capital gains tax instead of ordinary income tax. Secondary CERs are to be classified as trading stock and be taxed accordingly. (3) Motor vehicle ad valorem excise duties Policy measures to address the environmental and social costs associated with the transport sector, such as reforms to vehicle and fuel taxation, seek to promote fuel efficiency, limit the rapid growth of the number of vehicles on our roads and encourage the use of public transport. Improved fuel efficiency is important in curbing the growth in greenhouse gas emissions. It is recommended that the existing ad valorem excise duties on motor vehicles be adjusted to incorporate CO2 emissions as an environmental criterion as from 1 March 2010.

28 Environmental Fiscal Reform (2)
(4) Taxation of incandescent (filament) light bulbs The introduction of an environmental levy on incandescent light bulbs to promote energy efficiency and reduce electricity demand is proposed. Energy-saving light bulbs last longer, require five times less electricity and result in lower greenhouse gas emissions. It is recommended that an environmental levy of between 1 cent and 3 cents per watt (about R3 per bulb) be levied on incandescent bulbs at the manufacturing level and on imports from 1 October 2009 (5) Plastic bag levy The levy on plastic shopping bags was introduced at 3 cents per bag in 2004/05. Together with the agreement between government and the retail sector to charge for such bags, this levy has helped to reduce waste. It is proposed to increase this levy to 4 cents per bag from 1 April 2009. (6) International air passenger departure tax The international air passenger departure tax, which stands at R120 per passenger on flights to international destinations and R60 on flights to Southern African Customs Union member states, was last raised in 2005/06. It is proposed to increase these amounts to R150 and R80 respectively from 1 October 2009. (7) Increasing the general fuel levy Increase in the general fuel levy

29 Ad Valorem emissions tax rate on motor vehicles (Y)
Emission component CO2 g/km CO2 emissions tax rate 100 0.0% 110 120 140 1.3% 160 2.7% 180 4.0% 200 5.3% 220 6.7% 240 8.0% 260 9.3% 280 10.7% 300 12.0% 320

30 Ad Valorem "luxury" excise duty rates on motor vehicles (X)
Retail Price Current rate Proposed rate Deviation 50,000 0.5% 0.0% -0.5% 100,000 1.7% 0.6% -1.1% 150,000 2.9% 1.4% -1.5% 200,000 4.1% 2.2% -1.9% 300,000 6.5% 3.8% -2.7% 400,000 8.9% 5.4% -3.5% 500,000 11.3% 7.0% -4.3% 600,000 13.7% 8.6% -5.1% 800,000 18.5% 11.8% -6.7% 864,500 20.0% 12.8% -7.2% 1,000,000 15.0% -5.0% 1,312,500

31 CONCLUDING REMARKS MBIs can play a role in achieving environmental goals. Develop appropriate regulatory measures and institutional capacities to properly monitor and enforce such interventions and enhance their effectiveness. The effective (global and coordinated) implementation of appropriate MBIs (environmentally-related taxes, charges and incentives) is key to address some of the complex environmental challenges we are facing – especially climate change. Guard against the further “socialization” of private costs (negative externalities) and the “privatization” of social benefits (a potential problem with cap-and-trade), e.g. windfall profits by energy sector in some EU countries.

32 Thank you. Questions ???

33 A Carbon Tax vs. “Cap-and-Trade”
1. EU Commission, 16 Jan 2009 SEC(2009)53, analysing the replies to the Green Paper on market-based instruments for environment and related policy purposes. 2. The Case for a Carbon Tax, Richard N Cooper, Harvard University 3. The U.S. Climate Task Force: Addressing Climate Change without impairing the U.S. economy. Robert Shapiro, Nam Pham and Arun Malik, June 2008 4. Carbon Fees with 100% rebate preferable to “Cap-and-Trade”, Laurie Williams and Allan Zabel. ( 5. Greg Mankiw of Harvard ( 6. Designing a Carbon Tax to reduce U.S. Greenhouse Gas Emissions, Gilbert Metcalf. Working Paper 14375, NBER, October ( 7. After Kyoto: Alternative Mechanism to Control Global Warming, William D. Nordhaus, March 2006 – Yale University. Carbon Taxes vs. Tradable Permits: Efficiency and Equity Effects for a Small Open Economy, John Freebairn, University of Melbourne, February 2009. Urban Emissions and Market-Based Administration: Burdens and Risks” Prof Janet Milne - Environmental Tax Policy Institute, Vermont Law School, USA. The Ninth Annual Global Conference on Environmental Taxation, 6-7 November 2008, Singapore

34 EU Commission, 16 Jan 2009 SEC(2009)5
Concerns about volatility of carbon prices under the EU emissions trading scheme (EU ETS) Using revenue from environmental taxation for income tax rebates or financial incentives for low-income households to move towards using energy-and carbon-efficient technologies EU Energy Taxation Directive (ETD) – amendments aimed at clarifying the interaction between emissions trading and energy taxation. The CO2 part of the tax should be similar across the EU and should send similar signal to the EU emission trading scheme. Exempting ETS sectors from CO2–related minimum taxes (page 11)?? Use of revenue from emission permit auctions to promote innovative technology and research (page 15)

35 Richard N Cooper – A Global Carbon Tax
“There are negative and positive arguments for introducing a tax on emissions of greenhouse gases (GHGs)”. “The negative argument is that the leading alternative, quantitative goals with a trading regime in emission rights (cap-and-trade), is almost certainly political unsustainable on a global basis” “The key alternative is to focus on level of effort rather than on quantitative targets, on the introduction, within an internationally agreed framework, of a domestic tax on GHG emissions, revenues to accrue to the government of each country where the emissions occur”. “a common tax to be levied on the major sources of carbon dioxide emissions” – phase in over a number of years to US$50 per ton carbon or US$14 per ton CO2”. Where the revenue is not needed, or where an increase in the total tax burden is politically insupportable, the new revenues could be used to reduce other taxes”. “Reduction of emissions may not always be the most efficient way to limit growing atmospheric GHG concentrations. Sequestration of CO2 from the atmosphere should be included in the menu of permissible actions. Subsidies (at the agreed CO2 tax rate) could be given for sequestration, or tax rebates where the sequester is also the emitter”.

36 Richard N Cooper “Atmospheric concentrations cannot be limited in the next few decades without sequestration of carbon dioxide from major emitters – carbon capture and storage (CCS)” “It is much cheaper to design a new plant with CCS in mind than to retrofit an existing plant for carbon capture” “One way or another, the energy-consuming public is going to have to pay higher prices to cut demand for fossil fuels and to induce emission-reducing technical changes in the energy system”.

37 The U.S. Climate Task Force: Addressing Climate Change without impairing the U.S. economy. June 2008
There are three broad policy approaches to contain climate change: “One strategy would use command-and-control regulations to cap CO2 and other GHG emissions by industry and producers” “However, such regulation is highly inefficient, since it would impose the same caps on energy use or emissions on producers who could meet them at relatively little cost as it would on others who would face much higher costs”. “A second approach would cap emissions, while permitting producers to sell and purchase permits to produce emissions up to their caps”. “Those who could cut their emissions inexpensively will do so and sell their permits to those whose cost of cutting emissions would be greater than the price of the permits” “While a cap-and-trade approach is less costly to an economy than command-and-control regulation, many economist have concluded that it could be a source of significant new volatility in national energy prices, expensive to administer, prone to manipulation, and very difficult to monitor and enforce - page 11”.

38 The U.S. Climate Task Force: Addressing Climate Change without impairing the U.S. economy. June 2008
“A third major alternative is to directly tax carbon or CO2 emissions”. “It would directly and predictably raise the relative price of goods and services based on their carbon intensity”. A carbon tax would not create the new price volatilities, administrative burdens, and large opportunities for evasion and fraud that could characterize a cap-an-trade program”. However, a carbon-based tax approach cannot guarantee the specified reductions in annual CO2 emissions promised by command-and-control or cap-and-trade approaches. To overcome this deficiency, a carbon-tax program could include automatic adjustments in its rate to offset shortfalls in forecast CO2 reductions – page 11”.

39 The U.S. Climate Task Force: Addressing Climate Change without impairing the U.S. economy. June 2008
“Every approach to climate change – carbon taxes, cap-and-trade programs or regulation – ultimately involves higher energy prices – page 3” “Apply a tax or charge to fuels based on their carbon content, at levels required to reduce emissions sufficiently to move to a path that over time would stabilize GHG concentrations in the atmosphere at sustainable levels; and Use most of the revenues to reduce other taxes for people and businesses (e.g. payroll taxes); 90 per cent, and 10 per cent for investments in energy and climate-related R&D, and in the deployment of climate-friendly fuels and technologies”. “This strategy would change the relative price of different forms of energy based on their carbon content, so that people and businesses have strong incentives to shift to alternative and less carbon-intensive fuels, and more energy-efficient technologies – page 7”

40 Laurie Williams and Allan Zabel – Carbon Fees, California
Cap-and-Trade program in the US aimed at reducing SO2 emissions (acid rain?) from coal-fired power stations. Switching to powder river basin low sulfur coal, new technology, new infrastructure. Problems: over-allocation, inaccurate measurement, price unpredictability, windfall profits, market failure = safe harbor, offsets. Carbon fees – gradually phased in on all fossil fuels at the first point of sale following import or extraction. All fees to be placed in a Carbon Fees Trust Fund and promptly distributed to the public (100% rebate). Carbon fees with 100% rebate are not taxes. Taxes are imposed for revenue purposes, rather than in return for a specific benefit conferred or privilege granted. Sinclair Paint Co v. State Bd of Equalization, 15 Cal 4th 866 (1997).

41 Gilbert E. Metcalf: Designing a Carbon Tax to reduce U. S
Gilbert E. Metcalf: Designing a Carbon Tax to reduce U.S. Greenhouse Gas Emissions, NBER, WP 14375, October 2008 A tax on GHG emissions at an initial rate of US$15 per metric to of CO2e that gradually increases over time. A refundable tax credit for sequestered emissions and other approved sequestration activities. A refundable credit for the embedded CO2 in exported fuels and taxation imposed on the embedded CO2 in imported fossil fuels. An environmental earned income tax credit on personal income taxes equal to the employer and employee payroll taxes on initial earnings up to a limit. (pages 3 & 4)

42 John Freebairn: Carbon Taxes vs
John Freebairn: Carbon Taxes vs. Tradable Permits: Efficiency and Equity Effects for a Small Open Economy, February 2009 “In principle, a tax set at the marginal external cost (MEC) or a tradable permit with the quota set at the quantity equating marginal social benefits and costs (MSB & MSC) would result in a net gain in economic efficiency, p.1” “In a static and perfect world the carbon tax and tradable schemes are essentially the same with identical implications for distribution and for efficiency, p.7” “In a more realistic world of imperfect knowledge and when the relevant marginal abatement cost (MAC) and marginal external cost (MEC) curves vary over time, some important differences between the tradable permit system, essentially a quantity based policy intervention, and a carbon or emission tax, essentially a price based policy intervention, become important, p.7’

43 John Freebairn: Carbon Taxes vs
John Freebairn: Carbon Taxes vs. Tradable Permits: Efficiency and Equity Effects for a Small Open Economy, February 2009 “The tax option results in stable extra costs for greenhouse gas intensive products and production processes and incentives for R&D, but with volatility in the reduction of emissions. The tradable permit system results in the opposite of a stable and guaranteed level of pollution, but with volatility of the permit prices, p.8” “… there are some equity and fairness considerations of the carbon tax which seem more likely to facilitate the negotiation of a cooperative global agreement, p.13’ “ … a case can be argued that a tax system which automatically recycles money back to the developing country government and is robust to different growth rates is more appealing than a tradable permit scheme, and especially one which allocates permits with respect to an historical benchmark, p.13”

44 John Freebairn: Carbon Taxes vs
John Freebairn: Carbon Taxes vs. Tradable Permits: Efficiency and Equity Effects for a Small Open Economy, February 2009 “Failures of poor administration, and even corruption, of one country are largely contained to that country with a pollution tax. By contrast, with a tradable permit scheme, the failures of one country will spread to other countries and then potentially undermine the integrity of a global quota, p.15” Trade exposed energy intensive industries (TEEI) – transitional / interim assistance to early mover countries (product / origin vs. consumption based system (treatment of exports and imports), ‘carbon leakage’, pp.15-17 “A harmonised carbon tax would seen to offer some advantages relative to a tradable permit scheme, event though current policy is following the latter option, p.18”

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