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Fiscal Approaches to driving change
Stephen HintonThe Swedish Sustainable Economy Foundation
TSSEF.se
Congestion
• - Used materials pile up
• - Accumulation in wrong places
12
3
56 7 8
Case study phosphorous
4
12
3
56 7 8
Case study phosphorous
4
€2/kg
€20/kg
€600/kg
12
3
56 7 8
Case study phosphorous
4
€2/kg
€20/kg
€600/kg
The case
FORPollutant
surcharges
Stimulates investment in circular
technology
Creates jobs in the country with
nutrient recovery
Preparedness for future shortages
Infrastructure change takes time
The case
AGAINSTPollutant
surcharges
– Undermines infrastructure
investment
– Might be inefficient
– Very unpopular : poor people pay
more for food, etc.
– Technology exists, but is
unintegrated
CAN WE GET MODERN?
Jay Wright Forrester
Why General Electric’s factoriesshow inexplicable cycles
NOT TIME AND MOTION
BUT SYSTEMS
Citizens
State
Enterprises including
banks
Municipality
Complex systems are simple to control if you intervene at the right points
Citizens
State
1
4
3
5
2
Enterprises including
banks
Municipality
ATTENUATORS/Surcharges
1. VAT RATE CHANGES2. IMPORT FEE ON POLLUTANTS3. INTEREST RATE FEE ON MORTGAGE4. Dividend to citizens5. Property deed transfer fees6. Municipal charges
6
target
Too little, RAISE fee
Too fast, LOWER fee
DIVIDEND BEARING POLLUTANT SURCHARGES
LILLIPUT
DECLARATION
Per capita Ambition Instrument
Carbon dioxide 11 ton 0,25 ton Import surcharge 100
P import in chemicals 1 kg P 0,5kg Import surcharge 100
P Emissions 0,3 kg P zero Property waste emission surcharge
100
The Government of Lilliput has decided to introduce a circular economy for phosphorus. In 12 turns of the clock the land will halve its dependence on imported phosphorus and reduce emissions from human activity to zero.
The Government is appointing an Emissions Dividend Commission to • Raise or lower pollutant surcharges and decide on distribution of the collected fees to citizens.• Ensure prosperity of citizens whilst reducing dependence on imports of non-renewables and ensuring emissions abate.
Pollutant surcharge simulations
GOVERNMENT
FOOD PRODUCERS
PROPERTY OWNERS
TRANSPORTERS
THE VOTING PUBLIC
SCORE-KEEPING
0
100
200
300
400
500
600
1 2 3 4 5 6 7 8 9 10 11 12 13
Team 1
Team 2
Team 3
Team 4
Those who
invested made
more profit
Those who kept
prices low lost
0
100
200
300
400
500
600
700
800
900
Star
t 1 2 3 4 5 6 7 8 9
10
11
12
Prices
Spend power
Confidence in
politicians
varied – hard to
see patterns
Some take-aways
It is an economic and societal system
Explore a modern route with:
• Dynamic control
• Computer power
• Healthy diet
• Land function
• The Swedish SustainableEconomy Foundation
• TSSEF.se• [email protected]
Capital:• Infrastructure• Used in the provision of services.• It is not itself consumed.
Energy to operate, emissions
Energy to make(emergy)
Hi
Hi
Lo
Lo
Build once, use a hundred years(Hydropower, trains, trams)
Use, recycle(Baskets)
THE DRAIN(Cars)
Energy sink! Replace(oil lamps)
Extra slides
16/12/12
PC
C
N
N
ConsumptionBiological nutrients
ServicesTechnical nutrients
A short introduction to circular economy
PP
ECOLOGICAL MATURITY
CLOSED MINERAL CYCLESACCUMULATION OF PHOSPHORUSNITROGEN ACCUMULATION
LARGE BIOMASS•WOOD•LARGER ANIMALS•SOIL PRODUCTION•FUEL•WATER RETENTION
NUTRIENT CONSERVATION
•NUTRIENT-FREE WATER•NO LEAKAGE TO OTHER SYSTEMS
DETRITUS PROCESSING•DECAY•FUNGI
NICHE SPECIALISM•DIVERSITY
LEGAL ENTITYPROPERTY
Extraction
Import
Nutrienttransfer
LEGAL ENTITY
Product Sale
1
2
3
4
Points of surcharge1. Import 2. Property nutrient performance 3. Extraction fee4. Sales tax
National Boundary
Price basedChanges pricing in
existing market and levers behavioural
change
Rights basedSpecifies new
rights/obligations to lever behavioural change
Market frictionBehavioural change from making existing private
markets work better
E.g. changing taxes, introducing fees, giving
subsidies
E.g. introducing a Cap and Trade Scheme on
emissions
E.g. disclosing information by eco labeling, meat-free days
Potential MBI levers Command andcontrol
RegulationsBehaviour regulation
through regulation and inspection
E.g. limitations on NOx releases
Types of food Fat taxes
Amount of N appliedFertiliser taxes Surplus Taxes
Land use change Land use subsidies
and payments
Emission rights
trading
Infrastructure
adaptation
Surplus TaxesSurplus Taxes
Demand for Recycled
NFertiliser taxes Surplus Taxes
Demand for National food
Disposable income
VAT
Personal taxes
Planned Farm production
Farm practices
Regulations
Fines
Demand for imported food
Food price
Farm emissions
Trade agreements
Farm sector employment
Job availability
Subsidies
Farm inputs costs
N,P Recycling
Types of food
produced
Demand for Type of food
Market Friction
intervention
Import taxes
Fees on inputs
Pollution burden on society
Unemployment costs
Nitrogen availabilityFee revenue
Natural capital
preservation
Food affordabilty
Employment
Food sovereignty
Land Use change
Fossil fuel phase-out
Remedial action
Price control
Best Available Technology (BAT)
IPCC
Diet choices
Health
Water Quality Trading
Urban Waste
water treatment
System thinking
Demand for National food
VAT
Planned Farm production volume
Farm practices
Food price
Farm emissions
Types of food
produced
Demand for Type of food
Market Friction
intervention
Price control
Diet choices
Health
System intervention #1 The lowernitrogen-demanding diet
The low nitrogen- demanding diet radically reduces farm emissions as meat and dairyfarming emit proportionally more. A combination of price controls (e.g higher VAT on meatproducts) and information campaigns could influence demand.
Planned Farm production
Farm practices
Regulations
Farm emissions
Subsidies
Farm inputs costs
N,P Recycling
Fees on inputs
Pollution burden on society
Nitrogen availabilityFee revenue
Land Use change
Remedial actionBest Available Technology (BAT)
Water Quality Trading
Urban Waste
water treatment
System intervention #2 The nitrogen-accumulating land area
Paying for the public good of nutrient capture creates jobs in rural areas and creates a potential to recycle the nitrogen and phosphorus captured.
