Tax on carbon footprint — the fight for environment or for redevelopment of the market?

Tax on carbon footprint — the fight for environment or for redevelopment of the market?
Photo: sputnik.by

The EU can introduce a border carbon tax in the near future. As Realnoe Vremya wrote earlier, such tax could hit Russian exports — not least because of the weak use of domestic cogeneration. Igor Yushkov, leading analyst at the National Energy Security Fund and expert at the Financial University under the government of the Russian Federation, explains specially for Realnoe Vremya what the specifics of this tax are and why its main goal may not be to fight for the preservation of nature but to remake global markets.

The introduction of a carbon tax in the EU is an expected story, with all these climate doctrines and global agreements, it was clear that this was the case. This is why they were accepted: the Paris Agreement is not so much about climate change as it is about changing the global trading system.

What has happened in recent decades: the shift of the economy towards Asia, European and American goods have become less competitive. This is especially true for Europe — in Asia, there was cheap labour, energy for production was taken from coal generation, coal is cheap. The Europeans found themselves held hostage by their own environmental agenda. What they came up with to do: to raise the topic of global warming, climate change and under these slogans to make a carbon tax.

Photo: Loren Elliott/REUTERS (iz.ru)

This means that every product will have its carbon footprint tracked.

If the product is produced by electricity produced at a coal plant, then this footprint is large, and you need to pay a carbon tax for it. This tax will not go to the budget of a particular country but to the global fund, from which you will need to draw money for all sorts of climate programmes.

As a result, the cost of goods produced in countries with “dirty” energy will significantly increase in comparison with European goods. And there will be a redistribution of global markets, any — from clothing to missiles.

Russia and China will always have a much larger carbon footprint than countries with less coal and gas power. Moreover, if it has always been believed that gas is an environmentally friendly type of fuel, then according to the methods proposed under the Paris Agreement, it turns out that gas is allegedly even more harmful than coal — it releases more greenhouse gases.

Coal smokes, people die from it, but the greenhouse effect is less, so it is not so bad. Besides, they suggest counting methane emissions from gas pipelines — for example, if you have 100 kilometres of gas pipeline, there will be a certain amount of methane emissions, it is not clear why.

As a result, everything that is done in other countries will be more expensive — this whole story has nothing to do with the climate, at least the primary one. That's why the US withdrew from the agreement — initially the US supported this story, but then there was the “shale revolution”, and they became the largest producer of gas, coal and oil, they also produce a lot. Therefore, they left there because all their bonuses that appeared in the form of cheap energy, they will be leveled.

Photo: err.ee

Russia has a fairly large share of gas — that is, our generation is not dirty. The problem points are coal stations. If we talk about environmental problemmes, global warming is not at the top of the list of these problems.

There are enterprises with huge emissions, and these emissions must be combated. At the same time, the damage to the climate from these enterprises is small, and the international agenda does not concern them.

To save the environment, we need to do absolutely not the things that Greta Thunberg suggests but the daily work — treatment of the emissions of enterprises.

From the point of view of the carbon tax agenda, due to the high share of gas generation, the carbon footprint of our products will be very large. Although we have products, such as aluminum, which energy is taken from hydroelectric power stations, which do not produce a carbon footprint. It is believed that the more hydroelectric and nuclear power plants there are in the country, the lower the carbon footprint. In this regard, aluminum does not need to worry at all. In this regard, we have Deripaska, RUSAL, for example, supported the carbon tax — its global competitors just use fuel for electricity production.

By Igor Yushkov