Europe makes shipping vessels pay for carbon emissions

https://www.maxinomics.com/blog/europe-makes-shipping-vessels-pay-for-carbon-emissions

122 173 4 years ago

MBCook• 4 years ago

Good. We should do the same.

"starting in 2024 all shipping vessels going in and out of Europe will need to buy enough permits to cover 40% of their emissions, by 2026 it’ll be 100%."

If we (the US) do the same, presumably we'd need a scheme to split the obligations from the permits, otherwise shipping companies will be subject to double (or more) taxation.

Of course any system like this will be gamed - maybe the long-haul cargo ships from China will unload outside of the EU, but close to Europe (Turkey? UK?), re-load the cargo on another ship and pay for the much smaller amount of emissions on that final journey.

bombcar4• 4 years ago

It'll be interesting to see how it's gamed, but that doesn't mean we shouldn't try - you will get things like this: https://www.youtube.com/watch?v=oP1Oq3JLNbc but they can be corrected for later.

One solution would be to switch the tax to a tariff on goods that can be avoided if you prove reduced carbon travel. So if your goods are from China, you get the 100% whatever it is, but if you can show that they travelled from China on whatever is considered acceptable, it drops to 20% or 0% or similar.

o_12• 4 years ago

Good, yes tax things we need more? Where is this money going? Are we funding research for hydrogen powered freight? 1st world taxation almost always affects the bottom rung of the planet while building endless coffers of money for the wealthy.

youngtaff• 4 years ago

Saw an article the other day that stated roughly 40% of shipping is moving fossil fuels around the globe, so using less fossil fuels has a double bonus

thatcherc• 4 years ago

That's a big takeaway I got from the book Electrify by Saul Griffith (a really good read). The book only really looks at US carbon emissions, but a substantial chunk of emissions comes from refining and transporting petroleum projects -- these are emissions that occur just to prepare gasoline to be burned! Switching to electric cars (or just fewer cars) has the same double bonus as you mentioned in that there's less tailpipe emissions and less petro processing and transportation emissions as well.

arcticbull3• 4 years ago

For what it's worth, marine shipping is the single most fuel efficient way of moving anything anywhere. A large cargo ship can move a ton of cargo up to 1000 miles on a single gallon of fuel. [1]

Second is freight trains, at about 500 miles per gallon per ton. [2]

[edit] #3 is freight trucks at about 134 miles per gallon per ton [3] and pulling up the rear is air transport at at somewhere around 1/10th of trains.

[1] https://www.extension.iastate.edu/grain/topics/EstimatesofTo...

[2] https://www.aar.org/article/freight-rail-moving-miles-ahead-...

[3] https://www.csx.com/index.cfm/about-us/the-csx-advantage/fue...

acdha2• 4 years ago

My understanding is that shipping is fuel efficient but not emissions efficient because that hasn't been required by the flag countries popularly used to register vehicles so you're basically seeing things like a half century-old design from an emissions control perspective. Since that industry is so cost sensitive something like this makes sense for closing that loophole.

arcticbull3• 4 years ago

I agree, but it seems like they're charging them for carbon, not for other emissions? If you want to cut down on carbon, taxing air freight seems like the way to go.

My concern is they're likely to redirect marine cargo to other modes which is going to be worse from a carbon intensity perspective.

Cerium• 4 years ago

Sounds like a great place to start since the cost will be very low per ton of cargo?

pipo2343• 4 years ago

True. But at the same time, it should also be noted that the top 16 largest ships emit as much CO2 as all cars in the world.

https://www.lngtransfer.com/news/the-16-biggest-ships-produc...

polski-g• 4 years ago

The article you linked does not support your claim.

deepnotderp• 4 years ago

No.

Ready your own link, the top 16 ships produce more particulate emissions (sulfur and nitrogen oxides especially), because of low regulations and cost pressures driving the use of low quality fuels (bunker fuel).

nicoburns• 4 years ago

It's still not nearly as efficient of not moving things in the first place. Perhaps if shipping has to pay for it's carbon emissions then it'll shift the economic balance more towards local economies.

FpUser3• 4 years ago

And many local economies are no longer capable of producing anything meaningful at the prices "locals" can actually afford.

legitster6• 4 years ago

Agreed. Though if there is an easy win here like using slightly higher grade bunker oil to power the ships, the impact could be huge.

charles_f4• 4 years ago

Wrong, the most carbon efficient transport mode is not to ship at all. Taxing transport creates the opportunity for local manufacturing to become profitable

ictebres• 4 years ago

It is beyond me how this snail pace of changing the economy to be more sustainable can be interpreted as break neck speed. What was break neck speed was maybe the corona response, which was a good thing and could be happening on climate front more…

xfitm32• 4 years ago

I couldn't disagree more. The response to corona decimated the economy and many businesses. The first priority for life on this planet is to have a decent quality of life. Not being able to afford food or other essentials is hardly a noble objective.

iudqnolq• 4 years ago

The first priority for life on this planet is to have a decent quality of life.

Yes. Unfortunately, you can't have a decent quality of life without a quality environment to live in.

waboremo• 4 years ago

Why does the economy take precedent over life itself?

ako6• 4 years ago

You can’t have quality of life if you have no life at all.

it_citizen4• 4 years ago

Look at any recent studies about the projected cost of climate change in the decades to come or read a bit about the geopolitical consequences of what 2 degrees means.

The consequences of the response to Corona will seem like a nice a problem to have in comparison.

And contrary to a bad economic cycle, once the CO2 is in the atmosphere, there is no fixing it at a meaningful scale.

p0pcult3• 4 years ago

The first priority for life on this planet is to have life

Fixed that for you.

AYBABTME2• 4 years ago

To be fair, there's limited shipbuilding capacity in the world, with a few dozen very large shipyards capable of producing a few dozens ships a year. And they're busy as is. Also given the shear scale of those yards, it's not like you can just build new ones on demand. Those things are huge, they span the size of a medium city, and require an entire economy of skilled people around them.

So even if we were to replace all of the world's fleet to be more energy efficient (which would almost by definition mean larger/longer ships, since they benefit from hydrodynamic efficiencies), it would take a lonnng time to replace the world's cargo fleet.

LeifCarrotson• 4 years ago

if we were to replace all of the world's fleet to be more energy efficient (which would almost by definition mean larger/longer ships, since they benefit from hydrodynamic efficiencies)

The hydrodynamic efficiencies are a small part of the problem, there are many other things that can be done. You don't need to scrap a perfectly good hull, you can simply choose to run slower, burn higher-quality fuels, or strap on an oxidation catalyst (DOC) to cut CO, particulate filter (DPF) to reduce particulate emissions, or add selective catalytic reduction (SCR) to reduce NOx emissions.

But until regulation and the market catch up, old ships will choose to run too fast, to burn whatever's cheapest, and to vent their exhaust directly into the atmosphere.

legitster6• 4 years ago

I mean, if we wanted to decarbonize at break neck speeds - nuclear power and geoengineering are right there. Instead we are working with a very narrow band of acceptable solutions.

Schroedingersat• 4 years ago

Gen III+ or earlier nuclear is a way of slowly solving 10% of the problem. It's not fast and it's limited by an irreplaceable critical mineral the overuse of which would delay full deployment of Gen IV in many scenarios.

It's not yet clear that Gen IV is faster or less limited by other critical minerals.

Dedicating your shipyards to building offshore wind cranes gets more carbon off the plate sooner than adapting it to build reactor vessels even if you only use the crane for a few years. Building more heavy casting is slow.

Every other step of the supply chain is even slower and more prone to overruns than the glacial pace of reactor construction.

Geoengineering is the last ditch emergency button. Once we hit it we can't unhit it and it might break other things.

paganel4• 4 years ago

Not sure the governments’ response to Covid should be an example for “this is how things should be done”. After all there are so many bank accounts that a liberal premier can block.

solarkraft• 4 years ago

The german covid response was fast for an inert and badly prepared government apparatus. I was still impressed and they were just about in time, but what had to happen was still known well in advance. Everything that had to happen was known way before the virus was a thing, the button just had to be pressed.

kybernetyk• 4 years ago

Great. Another nail in the coffin of the economy.

nxm• 4 years ago

Everyone praising this will wonder why the cost of everything has gone up once it’s implemented. Meanwhile India and China continue to build many coal fired power plants each year

isthispermanent7• 4 years ago

To be fair though China is doing a lot of work to get to renewables. They are currently the largest producers of solar/nuclear/wind electricity: https://www.maxinomics.com/map/solar-electricity-generation

jylam• 4 years ago

Everyone praising this will wonder why the cost of everything has gone up once it’s implemented

People are not a bunch of idiots. Climate change is very real. Using other sources of energy requires investments. It is mandatory. All those are facts, as far as I know.

If your only arguments are "it will hurt the economy" and "people won't understand", you didn't take the measure of the problem and are part of it. That's very short-sighted, and tends to prove you don't really know what you are talking about.

themitigating7• 4 years ago

"The other kids are doing bad things, we should do them"

Is that your argument? Because someone else is polluting we should?

ZeroGravitas2• 4 years ago

Talking of India:

Indian coal magnate Gautam Adani goes green

Asia’s richest man, coal magnate Gautam Adani, made his vast fortune betting on coal as an energy hungry India grew swiftly after its economy was liberalized in the 1990s
He's now set his sights on becoming the world's biggest renewable energy player, by 2030, adroitly aligning his investments with the government’s own priorities.
As India grapples with climate change, the Adani Group, whose operations also span ports, power, farming and defense manufacturing, plans to invest $70 billion in solar, wind and other green energy projects over the next decade.

https://www.independent.co.uk/news/gautam-adani-ap-narendra-...

smileysteve3• 4 years ago

It seems your position that change can never happen - that no one should be an idealist as long as anybody else is not an idealist?

yongjik• 4 years ago

Then you should be happy as this policy will directly interfere with India's and China's exports to Europe, resulting in less demand for coal power and also less money for them to build coal plants.

s1artibartfast2• 4 years ago

I'm curious how the carbon credits are priced and where the money goes.

Is it purely a disincentive or does it somehow work to offset the emissions?

isthispermanent7• 4 years ago

It's mostly a disincentive. At least a chunk of the money goes to member countries to help transition away from fossil fuel use.

There are a variety of rules and mechanisms to ensure the money that is distributed gets spent that way. How effective those rules end up being in real life I'm unsure.

The World Wildlife Fund is one of many publications that's skeptical of the efficacy of how the money is spent: https://www.wwf.eu/?8275441/ETS-revenues-report-2022

o_12• 4 years ago

There is no mention of alternative power sources for maritime cargo.

jandrese3• 4 years ago

Carbon credits are currently mostly just a tax.

The fundamental problem with carbon markets is that there is literally no supply. In a properly functioning carbon market these carbon emitters would be buying units of "tons of carbon removed from the atmosphere". Just paying the cleanup costs of the pollution they are emitting. Very simple. The problem: nobody has any large scale carbon capture projects to buy from.

What should be happening is that carbon capture projects should be selling their services on the market and these emitters should be buying them at market prices. This would create a carbon capture economy and encourage people to find more efficient ways to do it, since a more efficient solution would produce a superior product on the marketplace and capture more sales. But all current carbon capture technology is small scale and outrageously expensive so it would crush the fossil fuel industry. But without an incentive like this the carbon capture tech will develop very slowly as it has done over the past 30 years since there is little to no demand for it.

The worst part is that even if we did decide to zero out our emissions and take the massive economic hit, it would still not account for the two centuries of CO2 buildup already in the atmosphere.

klabb32• 4 years ago

But without an incentive like this the carbon capture tech will develop very slowly

I don't think that's a big issue. If the tech was economically viable it wouldn't be hard to lobby for such regulation. The positive net effect is easy to prove and argue for.

I think what's stopping carbon capture has more to do with the expected efficacy of it. I mean, when you have ~400 ppm CO2 in the air it's a bit like reassembling a broken glass. Sure, you can improve every process with engineering, but there are also physical boundary conditions that look pretty bleak for most forms of CC.

even if we did decide to zero out our emissions and take the massive economic hit, it would still not account for the two centuries of CO2 buildup already in the atmosphere.

Perhaps one step at a time? We are absolutely nowhere near zero emissions, we don't even have a plan. Our entire civilization runs on hydrocarbons today. Nothing against CC research per se, but it doesn't look like a basket where we should put many eggs in.

adgjlsfhk13• 4 years ago

The fatal flaw with this line of reasoning is that carbon capture is guaranteed (by entropy) to be energy negative. We aren't in an either or of zero out emissions or carbon capture. We need to zero out emissions *and* carbon capture. Large scale carbon capture is only viable with large excess amounts of renewable power.

s1artibartfast2• 4 years ago

Seems like a reasonable solution would be to make a market for a subset of emissions and increase it slowly over time. For example, you could require 0.1% be purchased in carbon markets in scale that number up over time as the carbon Market place grows and costs go down. It seems strictly better than a flat tax that goes into the general fund.

cormacrelf• 4 years ago

It’s like a tax paid up in advance. The government can create carbon credits out of thin air, they sell them to you, you get to emit without breaking the law / getting fined. The government decides how many to create, and sets the price that way because the market decides how much being able to emit carbon is worth. The incentive is not to have to pay for them. Reduce your emissions, improve your bottom line. Simple as that.

This isn’t an offset scheme but you can buy some kinds of offset credits and use them like the basic emissions credits as essentially a license to emit. But I think there’s some rethinking of offsets as a whole concept going on, a realisation that they’re actually not producing real results and just enabling emitters to keep going longer and more cheaply. If the claimed offset is not realised, then this is a massive net loss because of the lost time spent propping up emissions. So your offset efficacy has to be really high to be tenable, but while estimates vary, the harder we look at them, the closer to 0% effective they appear to be.

themitigating7• 4 years ago

Tesla would probably not exist if not for those credits.

bombcar4• 4 years ago

Perhaps if they never existed, but it would continue to exist as it is now without them.

superchroma• 4 years ago

Good.

988747• 4 years ago

Europe seems to be hell-bent on committing suicide, economically. Brits can consider themselves lucky, to abandon this sinking ship just in time :)

arcticbull3• 4 years ago

Luckily folks are starting to realize that's not the case. [1]

Centre for European Reform figures show that by the end of last year, the economy was 5% - or £31 billion - smaller than it would have been if the UK had stayed in the EU. [2]

[1] https://www.cnbc.com/2022/11/23/brits-are-starting-to-think-...

[2] https://www.itv.com/news/2022-06-09/brexit-cost-the-uk-billi...

FpUser3• 4 years ago

For whatever reasons including energy prices they're not doing particularly great either.

spookie3• 4 years ago

I wonder whose businesses aren't going to be up to snuff, and how much local economies are going to earn from this.

Really makes one think if it is indeed suicide...

Animatronio• 4 years ago

Yup, the EU aims to become irrelevant economically, not only politically & militarily. Probably to be a smaller target?

owisd2• 4 years ago

The UK replaced the EU-ETS with an identical scheme : https://www.gov.uk/government/publications/participating-in-...

isthispermanent7• 4 years ago

California has one as well. It's not nearly as tight as Europe's but they want to get to that point in the next few years.

jcampbell12• 4 years ago

This will increase carbon emissions. Shipping is the slowest, cheapest, least carbon intensive mode of transport per ton. Adding a tax to the greenest available option is as silly as tax on wind turbines.

owisd2• 4 years ago

This is part of the EU-ETS which is being rolled out to all sectors so you can’t avoid it by switching to a different mode of transport.

jandrese3• 4 years ago

Well you could dodge the tax by switching to sailing ships or the like, in fact I encourage companies to find ways to dodge those evil government tax men by switching to non-polluting forms of transportation. Stick it to big government!

dojomouse2• 4 years ago

It’s adding a tax to the fuel type for the category, not the category as a whole. The tax will increase the commercial incentive for cleaner shipping which will reduce emissions.

The tax isn’t remotely large enough to result in freight migrating to air. And trucking within the eu is already subject to a carbon tax.

jcampbell12• 4 years ago

Two effects here: First the substitution effect because the price gap narrows between other modes of transport which are less carbon efficient. Second, effect of switching to more efficient ocean cargo. The latter is quite small because fuel has been about 50% of the cost of ocean freight for a long time. The incentive for carbon efficiency has always existed for ocean freight.

goodpoint• 4 years ago

Too little too late.

thatwasunusual• 4 years ago

Maybe relate to a news article from Reuters instead of an obviously biased blog?

https://www.reuters.com/business/cop/eu-strikes-deal-make-sh...

isthispermanent7• 4 years ago

It's linked in the post and the author makes the point at the end that it's too early to determine how this action should be judged...

"In a decade Europe is either going to look like a genius on how to get tough things done or it’s going to be an economic madhouse, falling behind other parts of the world."

themitigating7• 4 years ago

How is it biased?

cube22222• 4 years ago

As a European, I'm so happy about this.

A system where emitters can ignore the actual cost of their externalities and push them down onto society at large to handle (through taxes) is broken.

This should also result in more funding around anything green tech related, when you actually have to pay the full price of the currently-used alternatives.

Ideally, there'd be a market with buyers (capturers) and sellers (emitters) (with a negative price, so cash flows from seller to buyer, obviously) for carbon emissions where the price depends on the actual underlying cost of capture, but that will hopefully come in the future, when carbon capture is commercially viable.

gibolt• 4 years ago

Carbon capture is so costly and energy intensive, that this likely won't come close to covering the cost. It is absolutely a step in the right direction, but carbon capture is unlikely to end up commercially viable.

bboygravity• 4 years ago

It's also insanely dangerous if it goes wrong.

svorakang2• 4 years ago

There are definitely examples of where CCS is commercially viable [1], but implementation is lagging, and the technology is very unlikely to scale to capture the amounts that we are releasing. It would generally make better sense to keep the C in the geosphere than to first pump it up, burn and capture it again.

[1] https://research.chalmers.se/en/publication/531680

Ygg22• 4 years ago

Not sure why you got downvoted.

Not emitting carbon is always going to be more effective than emitting then capturing carbon.

But most of green tech is a load of green washing (https://youtu.be/Zk11vI-7czE warning long video).

By most I mean non-nuclear, non hydro-electric.

Fact is that battery tech isn't up to task of high capacity highly reusable energy storage.

isthispermanent7• 4 years ago

> Ideally, there'd be a market with buyers (capturers) and sellers (emitters) (with a negative price, so cash flows from seller to buyer, obviously) for carbon emissions where the price depends on the actual underlying cost of capture, but that will hopefully come in the future, when carbon capture is commercially viable

These carbon permits (also called EUAs) are tradeable as futures and are highly liquid on the ICE exchange. There are even a bunch of ETFs, KRBN being the biggest and highest volume.

spookie3• 4 years ago

I wonder what else could be done to lessen the consumption of products made possible by continuous violation of human rights.

The cheap leather industry comes to mind.

it_citizen4• 4 years ago

I agree. Europe is kicking ass on the climate change front lately. They are definitely not doing enough but when I compare their actions to the actions other super powers, I can appreciate their efforts.

Really excited to see how the CBAM (https://en.wikipedia.org/wiki/Carbon_Border_Adjustment_Mecha...) will pan out.

briandear2• 4 years ago

Could anyone have a claim that reducing carbon is a negative externality for them? For example, warmer temps could benefit farmers in certain regions. Are they compensated by this scheme? Are we assuming that alleged warmer temperatures are bad for everyone? How is that decided?

xil3• 4 years ago

Right, and who do you think will pay for this new tax? It's definitely not the importers and exporters - it's the end customers, because everything will go up in price. They're not going to absorb those fees.

The only ones making money here is the EU governments imposing this.

burnished• 4 years ago

That’s the point - they have to pay the costs themselves, so if it turns out something isn’t important enough to be shipped at the ‘real price’ (including these externalities) then customers won’t pay for it. Instead of now, where everyone pays for it, and the real price is obfuscated.

smileysteve3• 4 years ago

Yes, the customers pay the tax, but the exporters and importers have to factor in the decreased demand (or margin) as the price has increased. And how they invest in the future.

And it goes to upstream businesses, if exporter Y has a lower tax basis, then they will pay rates approaching current exporter X.

it_citizen4• 4 years ago

Carbon tax supporters often advocates to redistribute the tax revenues equally to all citizen. That's how Canada does it.

It still penalizes polluters and raise the prices of the products emitting the most CO2 but it is a blank or positive operation for 80% of the population (and negative for the ~20% richest that are the polluting the most).

Look up carbon fee with dividends for more details.

oliwary• 4 years ago

Well, alternatively, everyone else in the world is paying for me to have cheap imported goods, especially the people I poorer countries who will suffer the worst from climate change. It seems fairer that I should bear the cost.

cube22222• 4 years ago

Right, and who do you think will pay for this new tax?

Consumers, of course, but not indirectly, with such a diluted notion of responsibility as it is now (by paying for externalities through general taxes). It will be priced into the products, as it should be.

This way products that are "greener" will be cheaper and people will have an incentive to buy them.

I have no problem with companies profiting off of the products they sell, or end customers paying for the actual cost of the product. It's just that a market without externalities having a price tag isn't a well-designed "free market".

doikor• 4 years ago

The price going up for such forms of shipping is the point.

So if a competitor figures out how to do the shipping cheaper due to it outputting less co2 (like trains running on electricity or just less polluting ships) those should over time win on the marketplace and shift the shipping industry to less pollution options.

edit: And the government can redistribute the carbon taxes to the part of the population this will hit the hardest easily by lowering VAT, income taxes at the lower end of progression or just direct subsidies.

axus• 4 years ago

Wouldn't the importer/exporter with less emissions have a competitive advantage? I think it's understood that citizens are paying a new tax to incentivize emission reduction by the companies.

charles_f4• 4 years ago

1. It's pretty much a closed system. "EU governments", as much as "governments" is villainized, remain just an entity in the loop. That money is not going straight in the pocket of politicians. It's going in the budget. More revenue on this front means less to pull from somewhere else. Brocken as the electoral system is, all politicians still have a very big incentive if they want to keep their jobs to keep taxation low as they can. If anything by redistributing that money to people the most impacted, or by using it to sponsor incentive programs to reduce local carbon footprint.

2. Yep, prices for transported goods will surge, which is the intended consequence. If the general price of imported goods raises, then locally manufactured goods become more competitive. This gives an incentive for customers to select products built more closely to their place. It also gives a financial incentive for shipping companies to invest in cleaner transportation if they want to keep business.

3. Overall, yes this is scary, but think about it at a systemic level. This creates opportunities for local businesses and employers to sell more. This lowers the incentive to keep exploiting low-paid populations across the globe, potentially shifting the balance on their side to make social progress. And this reduces the carbon footprint, which we freaking desperately need.

otikik• 4 years ago

We are already paying for it through bad air quality and climate change. It’s good that they feel that pain as well.

comte7092• 4 years ago

This line is brought out in every tax discussion.

Fundamentally, mainstream economics does not agree with your point of view. The bedrock of modern economic theory is clear on this: all prices are set by supply and demand.

Consumers pay the full tax burden only in the instance wherein demand is perfectly inelastic. Realistically, the more suppliers try to raise prices, the more consumers will shift to substitutes or demand less.

Ergo these taxes tend to fall on both consumers and suppliers, with the balance depending on the type of good and the market surrounding it.

l3uwin• 4 years ago

good, if true then when they price their wares appropriately accounting for all thebpollution the free market will crush them with cleaner, cheaper, local alternatives or people will just not buy the product. i thought capitalists loved this free market stuff, or is it just the cheap oil from imperialism they love...

legitster6• 4 years ago

A system where emitters can ignore the actual cost of their externalities and push them down onto society at large to handle (through taxes) is broken.

I'm not sure if you are being sarcastic. This announcement is for shipping companies to currently be rolled into the current Cap and Trade policy framework.

mytailorisrich• 4 years ago

There's no alternative to diesel for shipping vessels at the moment so the only thing this does is increasing prices for EU consumers and businesses.

It's like what triggered the Yellow Vests protests in France: a tax on diesel when people have no alternative. It seems that nothing was learnt from that.

A constructive approach would be to invest in developing alternatives then you can tax away to hasten change.

Article says that Europe will look either like a genius or a madhouse depending how this goes... well, track record isn't too good.

mqus• 4 years ago

It does make local alternatives(without shipping) or shipping over land via rail more competitive.

heywherelogingo• 4 years ago

Climate of mass destruction.

legitster6• 4 years ago

Cap and trade is an underrated climate policy.

It's clearly not as good as a true carbon tax, but it is much more politically palatable (it's ostensibly leveraged on companies, not consumers).

Rolling more industries into the cap and trade markets will only make the markets more robust.

rsj_hn4• 4 years ago

Government creating thinly traded markets that gatekeep essential services is always a bad idea. It funnels huge fees to wall street and creates opportunities for financial manipulation. It is Clinton-era neoliberal grift. I thought the fiasco of energy de-regulation made people a bit more realistic about inserting Wall Street into the middle of everything, but apparently there are still true believers in market solutions to what are major energy infrastructure issues, not consumer choice issues, or how-do-I-run-a-business-efficiently issues.

As always, demand-side engineering to incentivize hard supply side problems only serves to make things more expensive and enrich bad actors. If you don't believe that, then understand that many industries battle with high energy prices and are already doing their best to be more efficient. Your carbon tax is not going to be the difference maker. If you want to shift to a different form of energy, then build a power plant which provides the energy you want and take a power plant that you don't like offline. Do this one plant at a time until all have been changed. Same for shipping -- you don't like existing shipping tech, then create a replacement. Oh, that's too hard? Then why do you think the free market will solve a hard problem you can't? Don't go this roundabout way where you think you are incentivizing end users to pool their money together and build their own privately funded energy breakthrough.

By refusing to directly provision the replacement, what the government is doing is washing its hands and shifting the burden of hard R&D onto the private sector, which cannot bear this burden very well. So all it does is make stuff more expensive at a time when we are fighting inflation globally, and Europe is rapidly de-industrializing because of high fossil fuel prices.

klabb32• 4 years ago

It funnels huge fees to wall street and creates opportunities for financial manipulation. It is Clinton-era neoliberal grift. I thought the fiasco of energy de-regulation made people a bit more realistic about inserting Wall Street into the middle of everything[...]

Not saying you're wrong, but how does Wall Street capitalize from this? It looks more like a government money grab to me (if you want the cynical take), since the implementation is quite literally a tax.

That said, totally agree it's also an energy infrastructure problem – that governments have been incredibly stupid and naive with the last couple of decades.

legitster6• 4 years ago

That's the thing. We don't need R&D breakthroughs. We have infrastructure solutions today - they are just not cost effective for the suppliers because the free-market cost of carbon is $0.

Of course a carbon tax won't invent fusion - but I think it would be madness to make the case that people or industries don't adjust their consumption to adapt to taxes.

Keep in mind we have 30 years of data that shows cap and trade programs achieve their objectives and are pretty stinking cost effective.

cosmin800• 4 years ago

We really need those electric ships.

charles_f4• 4 years ago

No, we need to manufacture more locally. This creates the incentive for that.

solotronics• 4 years ago

where is all the lithium and rare earth minerals going to come from to electrify all the cargo ships?

badcppdev2• 4 years ago

The article says: "But the breakneck speed at which they’re trying to transition to renewable energy led directly to this year’s natural gas fiasco."

I'm pretty sure that Russian invading Ukraine made a big difference to the natural gas situation this year. Am I missing something or is the article talking about something I don't understand?

isthispermanent7• 4 years ago

Europe chose to deprioritize building natural gas capacity in the form of LNG ships and ports in favor of wind and solar. This order of priorities made them increasingly dependent on Russia's natural gas coming from two pipelines, Nord Stream 1 and 2.

So as many across the western world predicted, Russia used (and continues to use) that dependency as leverage to get leniency on their actions in Ukraine.

Natural gas will continue to be a critical bridge fuel to get to a world that is majority powered by renewables. Impossible to do without it.

Europe gambled Russia wouldn't do something like this and they lost. That loss caused the price of European nat gas to spike 2000% at one point and it's still up 800% today.

badcppdev2• 4 years ago

Thank you. You've expressed that really clearly. I feel your explanation is definitely missing from the article.

I wish I could say that Russia made a decision that contributed as well but that's like the frog blaming the scorpion.

svorakang2• 4 years ago

You are right, the article mostly wrong in my eyes. The article might be referring to Germany's closure of several nuclear plants, which to some extent have been replaced by coal and gas (but perhaps more correctly: extended the life of coal and gas plants, awaiting an ever accelerating renewable rollout).

briandear2• 4 years ago

Let’s ask this question: how much is carbon worth? And can a reduction in carbon be precisely correlated to a reduction in global temperature? If a ship emits slightly less carbon, can that impact be measured? If it can’t be measured, how can it fairly be priced?

ppeetteerr3• 4 years ago

What is the collected tax being used for?

It's one thing if the selling of the credits will be used to subsidize clean energy or to reduce the burden of the good purchased by lowering taxes. However, if the money is going towards growing other social programs, it may just make life more expensive for the average European.

Permit2• 4 years ago

or to reduce the burden of the good purchased by lowering taxes

Why would you want this? You want prices on shipped goods that emit carbon to be high so the average European will be less likely to buy them and choose cheaper (greener) alternatives.

The goal isn’t “punish the company that emits” it’s “punish the individual who chooses to create emissions through their purchases”.

ppeetteerr3• 4 years ago

The goal is to punish companies that pollute not the people who consume the goods. In making polluting goods more expensive, you open up space for competition that uses fewer pollutants to offer similar goods at lower prices.

LatteLazy• 4 years ago

If there is one thing we've learnt in 40 years of unilateral action, it's that unilateral action doesn't work...

lowkey• 4 years ago

Shipping vessels but not private jets. Rules for thee, but not for me and my friends.[0]

[0] https://bitluxtravel.com/eu-proposes-to-exempt-private-jets-...

orf• 4 years ago

What’s the relative % of private jet emissions compared to shipping vessels? Could this just be a talking point aimed at causing division?

DoingIsLearning• 4 years ago

You can see for yourself:

https://ourworldindata.org/ghg-emissions-by-sector

Shipping is 1.7% of global emissions while aviation 1.9%.

The immoral aspect is that jet fuel at the moment is literally tax free pretty much anywhere in the world. Not because of private jets but to prop up airlines from going insolvent. Not every 'fairness' discussion has to be a 'eat the rich' polarization.

If we are looking at % of emissions then all of this is a distraction, arguably the best bang for buck is to get energy storage + renewables and reduce energy from coal production. If we are looking at it from a social fairness aspect than jet fuel should absolute be taxed.

Europe makes shipping vessels pay for carbon emissions

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