Thursday, November 16, 2006

The Problem with Mr. Miliband’s green taxes

The idea that taxes can be or should be used to control or manipulate the behaviour of society is a frankly medieval concept. It is a throwback to the notion of centralised control much beloved by communists, socialists, religious sects and feudal lords. It lacks vision, trust and imagination. It is negative in its nature and penalising and restrictive in practice. The idea that people must pay more tax in order to change habits is like saying people must eat bad meat, to become vegetarians. It’s ridiculous.

In a modern, educated well informed society, people do not respond well to the stick because it’s simply unnecessary. They respond better to the carrots of reason, logic and intelligent debate. They react better to tax cuts for behaving well rather than tax increases for behaving badly, which only make life harder in countless ways for ordinary people.

The raising of taxes is not a solution for reducing anything other than individual wealth. Raising taxes will not convert carbon dioxide into oxygen. It will not prevent the continuing destruction of primeval rain forests. It will not plant a single new tree or convert combustion engines into electric hybrids. These things can only be done through multi-lateral government agreements and the ingenuity of scientists and engineers. These are the people that have to be motivated.

The less money people have in their pockets, the more difficult it is for them to insulate their homes or install solar heating panels or wind driven turbines on their roofs. Instead of taxing people, the government should be giving homeowners incentives to exploit new technologies. In so doing they will catalyse those industries to increase R&D and invest in newer more efficient and cheaper technologies to combat global warming. How is raising the taxes of ordinary people going to achieve any of these things? People do not have to be forced into green technologies. They all understand the need. They want only to be able to afford them. Taxation does the opposite and makes affordability more difficult.

Those that can afford higher taxes at least have a choice. They can either pay the taxes, move somewhere else where taxes are lower or give up their gas guzzlers because it makes simple sense to do so. Those that cannot afford the taxes, have fewer options. Increasing their tax burden in any way shape or form, will only make it harder than ever for them to afford greener technologies. That is why using increased taxes to change habits is such an appallingly sterile and stale approach to global warming.

How will we pay for it? On the face of it there are massive savings to be made in oil and gas imports. Paradoxically however, this will lower the price of oil and gas and rejuvenate demand for fossil fuels. This is a problem that economists and governments need to deliberate in depth. What will oil producers do initially as demand falls? What incentive will they have to switch to greener energy themselves when oil is plentiful and cheap and in their own backyard? These are matters that require a global approach that simple local taxation cannot begin to address.

We also need to recognise that for the time being at least, war is no longer an option we want or can afford. The only war left is the one to save our planet. World leaders should be sitting round a table as I write, agreeing to reduce military spending by at least 50% in order to transfer funds to the war on global warming. Failure to do so will render the word “superpower” meaningless, taxes irrelevant and life or much of it, extinct.

The Earth we are told is in mortal peril. So what are we doing spending billions in Iraq and Afghanistan when there is a much more serious threat to our survival than a few mad mullahs. If they must kill each other, we should not spend one penny to help them do it. These people need to start worrying about their future and that of their children, just like us. They need to be planting trees, building reservoirs and constructing wind farms to save their own hides from nature’s wrath. We are all in the same boat here and its sinking. Until governments start taking dramatic and meaningful action along these lines, how can any of us take anything they say seriously? Unless they do act and quickly, there is not a snowflake’s chance in hell of saving the planet simply by taxing 4x4s in Richmond or tripling congestion charges on gas guzzlers in London!

Here’s another conundrum. How will the Chancellor cope with all that lost VAT revenue he collects on oil and petrol as consumption falls? I suppose he will in time honoured fashion, start taxing all the green technologies, thus making them even more unobtainable for ordinary people. One thing is certain, Mr. Brown and all the other overpaid bureaucrats who live off our taxes will not suffer and nor will their pensions; at least not until they, like us are extinguished by our common Mother Earth, who is rapidly losing patience with her wayward children!

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