Climate change measures

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Climate change measures

• Whats in store for Irish industry

Dr Brian Motherway Motherway Begley Ltd
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Climate change mechanisms
Carbon Tax
Carbon Dioxide as a pollutant
IPPC
EU Trading
Agreements
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IPPC

• Protection of the Environment Bill 2003
• Energy and greenhouse gases in IPPC
• BATNEEC to BAT
• Emission Limit Values
• ELVs for CO2?

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Climate Tax

• Minister for Finance announced carbon tax in
  Budget 03
• Due to come in end of 2004
• Planning has started in earnest
• Design decisions to be made

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Approaches to carbon tax

• What to tax
• Who to tax
• Where to tax
• Tax levels
• Revenue

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Negotiated agreements

• Likely complementary measure to make tax more
  equitable
• Various design options
• Pilot project ongoing
• Main agreement types, and trading allocation,
  have much in common

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For the company
What would it feel like?

• Paying identifiable new taxes on fuels
• Possibly not a direct tax, but a price rise on
  electricity
• Exemptions (agreements etc)

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EU Trading

• CO2 Trading
• Draft directive agreed by Council of Ministers in
  December 2002
• To be passed by parliament this year (Summer?)
• First tentative trades already happening

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EU Trading Timetable

• Directive transposed Dec 03
• Allocation plans Apr 04
• Phase 1 trading commences Jan 05
• Phase 2 Trading Jan 08

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Whos on first?

• Annex 1 participants
• Generators
• Certain IPPC Categories
• Cement
• Glass
• Ceramics (brick, stone, ) with size criteria
• Plants with boilers over 20MW
• Certain opt out possibiliites for phase 1

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What happens?

• Initial allocation
• Historic, BAU, Benchmarking
• National registers, monitoring
• Trading
• Compliance and verifications
• Reckoning
• Fines - 40/T, 100/T

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For the company

• Small number of Irish companies likely to be
  directly involved
• Allocation likely to be difficult
• Much uncertainty
• More predictions of low prices than of high
  prices
• Most companies more affected by involvement of
  generators

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UK trading experience

• Climate change levy and agreements
• Carbon trading scheme
• Interaction between mechanisms
• Liquidity and price
• Compatibility with EU scheme?

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FAQs

• Credit for early action
• Accounting and verification
• Absolute vs relative emissions
• CHP and renewables
• Tax and trading

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Summary

• CO2 as a pollutant
• Targets are difficult
• Four main market mechanisms
• Companies could be in more than one category of
  regulation
• Interactions unclear

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Climate change measures
Brian Motherway brian_at_motherwaybegley.ie