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Climate change measures

Climate change measures. What’s in store for Irish industry. Dr Brian Motherway Motherway Begley Ltd. Climate change mechanisms. Carbon Tax. Carbon Dioxide as a pollutant. IPPC. EU Trading. Agreements. IPPC. Protection of the Environment Bill 2003 Energy and greenhouse gases in IPPC

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Climate change measures

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  1. Climate change measures What’s in store for Irish industry Dr Brian Motherway Motherway Begley Ltd

  2. Climate change mechanisms Carbon Tax Carbon Dioxide as a pollutant IPPC EU Trading Agreements

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

  4. 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

  5. Approaches to carbon tax • What to tax • Who to tax • Where to tax • Tax levels • Revenue

  6. 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

  7. 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)

  8. 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

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

  10. Who’s 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

  11. What happens? • Initial allocation • Historic, BAU, Benchmarking • National registers, monitoring • Trading • Compliance and verifications • Reckoning • Fines - €40/T, €100/T

  12. 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

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

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

  15. Carbon Tax IPPC EU Trading Agreements Summary • CO2 as a pollutant • Targets are difficult • Four main market mechanisms • Companies could be in more than one category of regulation • Interactions unclear

  16. Climate change measures Brian Motherway brian@motherwaybegley.ie

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