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Estimating the 'cost' of fuel tax credits is a tricky business
In calling for an end to fossil fuel subsidies, critics of Australia’s fuel tax credits system have highlighted its cost to Australian taxpayers and the budget bottom line.
The Greens have said that ending fossil fuel subsidies to big mining companies would save Australian taxpayers A$21 billion over the forward estimates (the next four years). On the ABC’s Q&A program, Greens deputy leader Larissa Waters said her party advocated:
getting rid of the A$24 billion over the forward estimates – that’s four years – in free money that goes to the fossil fuel sector in things like cheap diesel and accelerated depreciation.
These numbers are drawn from policy costings produced by the Parliamentary Budget Office (PBO) ahead of the July federal election.
The PBO’s 2016 post-election report, which details the budget impacts of various election commitments, notes that:
Parliamentary Budget Office, 2016 post-election reportThe Greens propose abolishing fuel tax credits for all industries except agricultural businesses, ending accelerated asset depreciation for aircraft, the oil and gas industry and vehicles (except for those used for agricultural purposes), and a range of other measures.
Opinions differ on whether fuel tax credits constitute a “subsidy” or not.
Most fuel users have to pay a fuel excise of 39.5 cents per litre. But businesses can claim exemption from this obligation in certain circumstances. This exemption takes the form of a credit for the fuel tax (excise or customs duty) that’s included in the price of fuel.
These tax breaks include fuel excise exemptions for off-road use of fuel by the mining industry and primary producers. There’s also a partial rebate for large trucks (over 4.5 tonnes), the owners of which pay a road usage charge rather than the excise.
The PBO has estimated that the Australian Greens' proposal of abolishing the fuel tax credit for all industries except agricultural businesses would increase the budget balance by about A$4.5 billion a year.
Unpacking the assumptionsHowever, it’s worth detailing the assumptions that underpin these calculations.
First, the PBO says its costing assumes that business fuel usage does not change as a result of the policy. As the goal of a higher tax is to reduce fuel use and pollution, the PBO’s reported estimate will therefore be an overestimate of the revenue gain.
Also, uncertainty about the future means that all such revenue estimates are far from guaranteed. The PBO notes that:
Parliamentary Budget OfficeMany consider the 39.5 cents a litre fuel excise a crude form of user-pays fee to cover the cost of government expenditures on public roads. The revenue raised by fuel excise of A$17.8 billion and state taxes on motor vehicles of A$9.5 billion for 2014-15 more than cover federal, state and local government spending on road construction, maintenance and other related costs.
This is the logical argument put forward by representatives of the mining industry for exemption from the fuel excise. They note that the mining industry builds and maintains its own roads. A similar argument applies for fuel used by primary industry for off-road purposes.
Others argue that fuel taxes help encourage people to use less of it, and thereby reduce pollution. However, a 39.5 cents per litre tax represents a very large tax per tonne of CO2 equivalent. If the fuel excise was regarded just as a tax on greenhouse gas emissions, the 39.5 cents per litre represents a tax of more than A$150 per tonne of greenhouse gas from the combustion of fuel – several times higher than the Gillard government’s A$24 per tonne carbon price, and the even lower European Union pollution permit price. It is stretching credibility to say the fuel excise is just a tax on pollution.
I’d argue in favour of the position taken in the 2010 Henry tax review, which recommended a roughly revenue-neutral reform package, replacing the current fuel excise and state motor vehicle taxes with a road user charge, a congestion tax and a pollution tax.
With this reform, the mining and agricultural industries would be exempt from the tax components on fuel for road funding and for congestion, but would pay a component for the external costs associated with greenhouse gas emissions.
John Freebairn does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.
Climate change predicted to halve coffee-growing area that supports 120m people
More than 120 million of the world’s poorest depend on the coffee economy, a report says, and their livelihoods are already suffering from temperature rises
Climate change is going to halve the area suitable for coffee production and impact the livelihoods of more than 120 million of the world’s poorest people who rely on the coffee economy, according to a new report by the Climate Institute, commissioned by Fairtrade Australia & New Zealand.
The report findings follow stark warnings by some of the world’s biggest coffee producers, including Starbucks and Lavazza, who have said climate change is posing a severe risk to the industry.
Australian communities are fighting food waste with circular economies
Around 4 million tonnes of food reaches landfill in Australia each year. This forms part of Australia’s organic waste, the country’s largest unrecovered stream of waste that goes into landfill.
There’s a missed opportunity here to recover this waste and do something useful with it. In particular, we can use it for energy such as biofuel. This forms part of a broader concept known as the “circular economy”.
In the absence of federal initiatives, state and local governments and communities are developing projects to foster a circular economy that can absorb this and other waste. This would then provide usable products to assist businesses and households and improve sustainability.
Simply disposing of waste in landfill affects households, businesses and governments. It requires time, energy and space, and poses environmental risks. When waste is repurposed for energy and fertiliser, it can give businesses a competitive edge, foster sustainable growth and create jobs.
The circular economyA circular economy aims to bundle policy and business strategies into a system that works for everyone.
On a wider scale, circular economies underpin food security by reducing and reusing the amount of food waste, utilising byproducts and food waste and recycling nutrients as fertiliser.
While one way of repurposing food waste is to turn it into biofuel, a circular economy does not require all waste to be repurposed. Unwanted food can be given to the needy, or go into further processing. The idea is we extract every joule possible from organic matter, which may require multiple uses.
Some overseas governments have policies that compel businesses to keep their waste out of landfill. These countries are well on the way to developing circular economies. The star performers include Denmark, Japan, the Netherlands, Scotland and Sweden.
In Australia, the federal government has offered no such incentives. Instead, communities are taking it upon themselves to repurpose waste. State and local governments are introducing policies that offer incentives for recycling, or penalties for producing landfill.
There is a growing interest in co-digestion to boost biogas production, particularly for small wastewater facilities.
Co-digestion is the addition of other waste streams such as:
municipal wastewater/sludge
food and drink manufacturer process waste (including waste from the beverage, meat processing, dairy, brewing and wine industries)
paper/pulp waste
greasy waste/fats, oils and greases (from grease trap pump-outs)
residential food and green waste (via trucked collection)
residential/commercial food waste (organics rubbish bins)
food waste (from supermarkets or supermarket chains).
So let’s have a look at recent advances around the country.
South AustraliaCommissioned in 2013, South Australia Water’s Glenelg wastewater treatment is Australia’s first co-digestion facility. The addition of food byproducts such as milk, cheese, beer, wine and soft drink has increased power generation from 55% to 75% of the plant’s power requirement.
The South Australian government is developing a bioenergy roadmap. The aim is to link biomass suppliers in regions to users of energy and help to support local businesses to add value.
VictoriaYarra Valley Water’s waste-to-energy facility is a new co-digestion development at Aurora Sewage Treatment Plant, north of Melbourne. It will process 100 cubic metres of waste each day. The waste is delivered by trucks from local commercial waste producers, such as markets and food manufacturing.
Through Sustainability Victoria, the state government is offering funding through the Advanced Organics Processing Technology Grants program, which supports the installation of small-scale onsite or precinct-scale anaerobic digestion technology for processing organic waste.
New South WalesAustralia’s best example of a community-driven circular economy is being developed in Cowra on the Lachlan River, part of the Murray-Darling catchment. This proposal shows the ability of state and local government, industry and farms to pool waste created in and around a country town to produce energy and fertiliser, which can be used within that same geographic circle.
The project will use two processes: anaerobic digestion and thermal recovery through either pyrolysis or torrefication (the breakdown of organic material at high temperature).
At full capacity, the Cowra biomass project will produce 60% of the town’s energy needs.
CLEAN Cowra: Creating a circular economy through aggregation of organic waste streams. MP= Meat processing; FP= Food processing; MRF= Materials recovery facility; WWTP= Waste water treatment plant; TR= Thermal recovery; AD= Anaerobic digestion; CHP= Combined heat and power. CLEAN CowraNSW’s council amalgamation process is also creating opportunities to link more waste producers and energy users through renewables that turn food, household and agricultural waste into power.
The NSW government’s Growing Community Energy grants have already helped the Cowra project.
The future?The drive for communities and businesses to reap the rewards of extracting value from food waste is a result of an emerging trend in infrastructure planning, where the once parallel fields of water management, waste management and energy are teaming up.
It appears CLEAN Cowra and its regional and state equivalents are influencing the direction of federal government policy with relevant priority areas for ARENA being identified.
Whatever the driver, anything that can keep organic waste out of landfill has to be a good thing.
This topic will be discussed at this week’s Crawford Fund Conference.
Bernadette McCabe receives funding from Meat and Livestock Australia (MLA) and Australian Meat Processor Corporation (AMPC). She is a member of Bioenergy Australia and is National Team Leader for the International Energy Agency's (IEA) Bioenergy Task 37: Energy from Biogas.
Lessons from a meadow brown butterfly
Crewe Green, Cheshire This one has had a lucky escape; with more than half of its wings gone, it’s surprising it can fly at all. Butterflies may look ethereal and fragile, but they are survivors
A flock of starlings lift up from the damp grass and swerve in the harebell blue sky as I cycle by. It’s a mellow morning with a hint of a breeze. Ox-eye daisies and buttercups adorn the hedgerows, nodding their heads. There are big clouds of feathery white meadowsweet; I can smell its marzipan scent. To my left and right, jackdaws are flying over open fields drenched in light, the sun buttering their edges. A plaintive, cat-like mewling: a buzzard is circling.
The university grounds are practically deserted. I freewheel across the bridge. Below, the rippling brook glints like tiny pieces of bottle-green glass. Midges skim the surface and an iridescent dragonfly. There is a wasps’ nest in the far bank.
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Balsam, a handsome but greedy weed: Country diary 100 years ago
Originally published in the Manchester Guardian on 4 September 1916
Kew Gardens, September 3
On a sunny day among gorse bushes, when the wind has fallen, you can hear the seed-pods of the gorse bursting all around you. Lying in a hammock near the Alströmerias in the garden you can hear the same sharp snap as the hard covering explodes and the seeds are projected far and wide. This method of distributing seeds is common to a good many plants.
A correspondent from Whalley Range writes of the balsam which was introduced into his garden some two years ago, and which is now “beautifying the gardens along the road” by its energetic method of propagation. “I was,” he writes, “for some time at a loss to understand how the thing spread, and imagined the seeds must he carried on the wind, until, on attempting to remove the pods, the mystery was explained. When the seeds are ripe, the slightest touch causes the pod to burst with a snap and the seeds fly literally for yards. This gives children a most delightful thrill, but the most amusing sight is to see a big bumble-bee blunder against the pod, which immediately snaps off and sends him staggering.”
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All is not pristine in New Zealand
Cities in the Land of the Long White Cloud suffer from pollution caused by the wood fires, that provide most of the domestic heating in poorly insulated houses
Most images of New Zealand show a pristine environment of great beauty. It therefore comes as a surprise that airborne particle pollution in many towns is above World Health Organisation guidelines. This is not due to the diesel cars that confound efforts to manage air pollution in Europe, or the density of cities and industry that contributes to problems in east Asia, Europe and parts of north America. It is due mainly to home heating.
With limited availability of natural gas and expensive electricity many New Zealanders, especially those in the South Island, rely on wood burning to heat their homes. National standards for particle pollution allow for one polluted day per year but Christchurch measured eight in 2015 and the city of Timaru breached standards on 26 days.
Continue reading...Ticked off: let’s stop our dogs and cats dying of tick paralysis this year
Tick paralysis is one of the most common preventable causes of death in dogs and cats along the east coast of Australia.
Some 10,000 dogs are affected each year, 5% of them fatally. That means 500 dogs will die from ticks each year, with the remainder undergoing discomfort and suffering.
What’s more, there is a great cost to owners. Bills for treatment range from A$5,000 to A$10,000 in the most severely affected patients.
In Sydney, the “tick season” begins in September (although there are no hard and fast rules). Caught early, ticks are easy and cheap to treat.
But if undetected, tick attachment can make for an expensive and sometimes tragic trip to the vet. So what’s the best way to keep your pet safe as the weather warms up?
How do ticks paralyse and kill?Tick paralysis results from a neurotoxin secreted in the saliva of the paralysis tick, Ixodes holocyclus, as it sucks the blood of mammalian hosts. As the tick feeds, it secretes holocyclotoxin (tick toxin) into the bloodstream.
This parasite normally lives on native Australian marsupials such as bandicoots, macropods and possums, which have developed some immunity to tick toxin.
Cats, dogs and children are generally not so lucky. After three to four days there is often sufficient intoxication (or envenomation) for the development of muscle weakness and eventually paralysis.
The tick toxin prevents the release of packets of acetylcholine neurotransmitter from the motor nerve terminals, which communicate with muscles. Typically, dogs developing tick paralysis first get a change in their bark, which observant owners pick up on. They may also regurgitate food due to weakness of muscles in the throat and oesophagus.
As the concentration of toxin in the blood rises, muscles get progressively weaker, resulting first in a wobbly hind-limb gait, then hind-limb paralysis and eventually flaccid paralysis of all four legs. Owners will often say dogs have “gone in the back legs”.
Paradoxically, cats get agitated and develop a funny breathing pattern with a soft grunt at the end of expiration. Weakness is typically less obvious to their owners, at least early in disease progression.
In advanced cases, the respiratory muscles are paralysed, which results in death unless the patient is placed on a ventilator.
Human babies and children can also suffer from tick intoxication. Historically, more children have died of (often misdiagnosed) tick paralysis in Australia than from snake bite, although this is rare these days because of modern intensive care practices and use of tick anti-toxin (antibodies against holocyclotoxin).
The life cycle of the paralysis tick results in this disease being seasonal, especially in New South Wales. Most cases occur in spring and summer, because this is when ticks are more active and numerous. It is also a time when pets’ acquired immunity is lowest.
Tick paralysis tends to be especially common in certain areas. For example, the northern beaches of Sydney are a hot spot, with Avalon often being called “tick central”. Many human patients with ticks attached are seen at Mona Vale Hospital in northern Sydney.
In Brisbane, southeast Queensland and the north coast of NSW, the tick season is longer and the disease is even more common. Paralysis ticks are not found west of the Great Dividing Range, so pets in Canberra are safe, unless they visit the coast for the weekend.
New preventative measuresTick paralysis is an eminently treatable disease, and management is straightforward if cases are presented early.
If you find a tick on your pet, all you need to do is lever it off using the correct technique (many advocate killing the tick first).
But if the diagnosis is missed, or if owners present affected cats and dogs only when signs are advanced, then treatment is complex and expensive. Tragically, some patients die despite advanced therapy including the administration of tick anti-toxin and assistance with breathing.
Not only is there a real risk of death, but all affected animals suffer from the disease. From a welfare perspective, it’s better to focus on prevention, rather than treatment. And because tick paralysis is preventable, it’s usually not covered by pet insurance.
Until last year, prevention relied on a daily search of every at-risk pet for ticks, and the prophylactic administration of systemic or topical acaricide or drugs with a tick repellent and/or killing action, such as fipronil or permethrin. These are all applied directly to pets' fur.
But these treatments can be washed off by rain, shampooing or swimming. Permethrin, although quite effective and safe in dogs, is devastatingly toxic to cats. Many were inadvertently treated (and killed) as a result of poor labelling of various canine products.
Last year there was a paradigm shift in tick paralysis prevention. MSD Animal Health released fluralaner (sold as Bravecto) – a new preventative drug. This is one of the first of a new class of drugs that act on both ticks and other arthropods, including fleas.
Fluralaner is available through vets or online as a chewable tablet for dogs. A transdermal formulation will soon be available for cats, which can be applied directly to the fur.
One tablet of the correct size will protect dogs against tick paralysis for four months or longer and be effective also against flea infestation for three months. (Australian studies show the drug is 100% effective against paralysis ticks for four months, and 96% effective for five months.) There are other products that are similarly effective but need to be given once a month.
Since last year’s tick season, vets up and down the coast have observed a sharp reduction in the number of dogs presented for tick paralysis. So we are pretty sure these new products are doing exactly what they are supposed to do.
The products would appear to be very safe to use on dogs, with a wide margin of safety. However, as with any drug, you should consider consulting with your vet.
My wish is to cajole as many pet owners to administer these drugs to all at-risk animals before the tick season starts in earnest.
At the moment, the simplest path is to recommend that all dogs get a fluralaner tablet towards the end of August and ideally again in December. A good way to synchronise this might be remember to give the first dose on Wattle Day (September 1) and then again on New Year’s Day.
If every dog owner did this, tick paralysis would be eradicated as a cause of death and suffering in dogs. And soon we will have a similar product suitable for cats, which we can just squirt onto the fur over their necks.
So, get your pet ticked off this spring.
Richard Malik does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.