Starting in April 2012, the Treasury plans to collect money from all businesses forced to enter its Carbon Reduction Commitment (CRC) scheme.
The green measure was due to be introduced in April 2011 to force companies to buy \”allowances\” at £12 for every tonne of carbon dioxide they emit.
Now, wearing one\’s Greenie hat, this is just fine. Energy isn\’t the only sector that produces CO2 or other greenhouses gases. Farmers should be paying for the methane produced by their cows, for the nitrates that fertilizer gives off (erm, I think that\’s right?). Brewers should be paying for the CO2 in beer (I once worked out that this was as much as the emissions from 30,000 households, or equivalent to the emissions of schlepping about the country all that bottled water we drink).
All emissions should indeed be paying the same rate so that we end up allocating those emissions we are allowed to have to the process that creates the most value: steak and ale, of course.
So, is that what they\’re doing?
Analysts from PriceWaterhouseCooper said the changes will cost an extra of £76,000 per year in the first year, rising to £114,000 per year by 2015, for a business with an average £1m gas and electricity bill.
No, of course not, don\’t be silly. These sorts of Green charges were designed by the likes of Sir Jonathan Porritt Bt. You know, the man without one single iota of economic knowledge.
So they\’re not going to tax non-energy emissions: they\’re going to tax energy emissions twice. For of course the energy companies have to go and buy permits under the cap and trade system. So we\’ve already dealt with emissions from energy production. Charging both the energy producer and the energy consumer for the same emissions is nonsense: it\’s double taxation for a start and it leads to energy being above the socially optimal costs.
So, yes, this is grossly twattish. Either the tax should be on non energy emissions by companies (for we\’ve already caught the energy emissions at the point of production, not consumption) or the tax shouldn\’t exist at all.
We always knew the Coalition would fuck up at some point and here\’s my nomination for the first obvious case of such. Much of what else they\’re doing is a matter of opinion (however forcefully held or argued) but this decision is quite simply wrong.
Of course, all of this is totally silly. But even pretnding for a moment to be a greenie, I’m pleased to say the beer is CO2-neutral – the CO2 it releases in the brewing process is equivalent to CO2 taken up by the barley being grown for the next batch of beer.
It’s the burning of fossil fuels that worries the Porritts of this world – it releases CO2 that isn’t being taken up by the equivalent process (at anything like the same rate).