How do I loathe thee

Let me count three ways

In April this year, the European Parliament voted in favour of extending the EU’s emission trading system to the transport sector, including maritime transport.

The vote was not unanimous. In fact, many left-wing MEPs voted against it. Why? Because, shocking as it may sound, they had retained a certain degree of common sense and knew what this extension would do: make life more expensive for the ordinary people, also known as their voters.

One MEP, the French leader of the Left faction in the EP, said something that sounded like a prophecy at the time: “I hope I am wrong but in a few years’ time people will hate climate policies. People will go to the far right parties.” I guess even she might have been surprised at how quickly the prophecy came true.

Manon Aubry was right. People are already beginning to hate climate policies and support for so-called far-right parties is surging across Europe. They’re even winning parliamentary elections. These election victories appear to have sounded an alarm in current governments. Finally.

Seven months after the EP voted on the ETS extension, the FT reported that the governments of major shipping nations in Europe are voicing opposition to the new rules, set to enter into effect from January next year. Better late than never, I guess.

Seven coastal nations, the FT reported, wrote a letter to the European Commission, saying the new rules will have an adverse effect on their shipping industries. They will also, per the authors of the letter, actually increase carbon dioxide emissions as shippers opt for longer routes to take goods from A to B and the rest of the alphabet.

This is what we’ve come to. Rational arguments about the potential for significant loss of business are not enough. You need to throw in a threat about rising emissions to get someone’s attention at the Commission.

The rules in question essentially impose a carbon tax on shippers doing business in the European Union in the same way that the ETS imposes a carbon tax on power generators using coal and gas as fuel. Judging by the effect the ETS has had on the economics of gas and coal generation, those coastal nations are right to protest. The question is, were they in a slumber for seven months?

Either that or they were simply not paying attention, too preoccupied with other things. But now that the deadline for CO2 tax-free shipping nears, a certain awakening appears to be in progress. After all, we’re talking about as much as 11 billion euro in ETS revenue for the EU coffers from shipping, per Lloyd’s List, as quoted by the FT.

Eleven billion euro is no small potatoes — that’s a lot of wind and solar farms you can subsidise. And that’s if the price of carbon permits stays where it is now, which is 80 euro per tonne and Lloyds’ List’s calculations are for a price of up to 90 euro per tonne. But if it rises, because, for example, there is a surge in demand because of a set of new rules for the transport sector, those coffers will get even fuller. Simple, if not too elegant.

But here’s the hilarious part. Under the scheme, the highest carbon tax rate will be slapped on oil and gas tankers. I know, shocking. And guess what this will do to the prices of energy imports into the EU. Well, it would do the same that the new methane regulations would do to its gas imports.