The Big Debate: Should my carbon footprint be taxed?

First, what is a carbon footprint?

Think of it as a way of measuring how heavily we all tread on the planet. It's a colourful way of expressing the amount of carbon dioxide, the main cause of global warming, we each emit each year. And this is serious stuff ­ it's measured in tonnes.

How many tonnes?

It depends on who you are and where ­ and above all ­ how you live. On average each of us in Britain has a carbon footprint of about nine tonnes. That compares with about 20 tonnes for each American and around 18 tonnes for each Australian. But the Swiss and the Swedes ­ with higher standards of living than us ­ manage to keep theirs down to about six tonnes.And the big difference,of course, is with the Third World. The average Chinese carbon footprint is about three tonnes, the average Indian one about one tonne and the average Ethiopian about a tenth of a tonne. Lightest of all in their impact are the people of Chad, contributing just one hundredth of a tonne of carbon dioxide each ­ that's 900 times less than us.

Does that matter?

Yes. It matters in rich countries like ours because our profligancy is helping to drive climate change: 44 per cent of all Britain's emissions of carbon dioxide come as a result of the choices we each make in our daily lives ­ such as how we use transport and heat and light our homes. And it matters in poor ones, because they will have to use more energy ­ much of it from the fossil fuels that emit the greenhouse gas ­ if they are to develop. Their need to grow means that we will have to cut our carbon footprints even more if we are to avert global warming running out of control. Science suggests that people in rich counties will have to shrink theirs by 80 per cent by the middle of the century.

Can it be done?

Absolutely. Really simple things like installing energy-efficient light bulbs, improving the insulation of our homes, and not leaving appliances on standby can do a lot. Investments such as getting a hybrid car, or installing solar panels on the roof, can do a great deal more. And new technologies and techniques will keep coming onstream. But human nature being what it is, it would be a great help if Governments took measures to encourage ­ or push ­ us to save energy.

What sort of measures?

Those most mentioned are "economic instruments" ­ which often boils down to a fancy way of describing taxes. Green taxes are becoming ever more popular: opinion polls suggest that Britons back them by a 2 to 1 majority. All the main political parties support them, if to differing extents ­ and several have been introduced by successive Governments, mainly on industry, over the past 15 years. Other countries, particularly Scandinavian ones, have done more. But nowhere has even begun to tap their full potential.

Won't that mean paying even more tax?

Not if it's done properly, as part of what has come to be called " ecological tax reform". That involves reducing taxes like income tax and national insurance by the same amount as green ones are increased, so that the Government's total "take" remains the same. We would therefore be paying more for electricity and petrol, but out of a bigger pay packet. In fact, this could create many more jobs as well as cutting pollution.

How so?

Income tax and national insurance effectively penalise work and employment, things we ought to be promoting, whereas green taxes bear down on things like pollution, which we should be curbing. Ecological tax reform would therefore switch the burden from "goods" to "bads", giving companies a greater incentive to lay off kilowatt hours than to sack people. Indeed a big EU study concluded that it would create at least 2.7 million jobs across Europe, while tackling global warming. Taxes on labour have helped cause employers to use labour 20 times more productively over the last 150 years. Increasing energy costs, partly through taxation, could cause firms to make similar improvements in efficiency, greatly reducing pollution.

But won't this just disappear into the Treasury's coffers?

It could do, but it would be much better ­ at least at first ­ to spend the money on things that will help tackle global warming. People are suspicious: two thirds of Britons believe that governments use climate change as a way of increasing revenue. Making sure that money from green taxes was spent on green projects ­ like improving the infrastructure for public transport ­ would help allay this concern and achieve a double whammy for the environment.

Surely there are drawbacks?

Indeed there are. Perhaps the biggest is that, while income tax is " progressive", hitting richer people harder, taxes on energy could be " regressive", disproportionately hurting the poor, who tend to spend a greater part of their income on keeping warm or getting around. But the Netherlands has shown that these can be tweaked so that they actually benefit the poor, by providing cheap energy to meet basic needs while charging more for luxury use.

So is tax always best?

Not necessarily. People do not always respond to price signals as neatly as economists like to think. Look at how many people still use old incandescent light bulbs even though they cost much more in electricity bills than new energy-efficient ones. It's unfashionable to say so, but regulation can work best. Australia for example has announced it is banning sale of the old style bulbs by 2010.

What about the future?

The really radical idea, increasingly supported by some leading politicians, is to introduce 'personal carbon allowances'. These would give everyone a set allowance of carbon dioxide each year ­ but allow these to be bought and sold. Thus those who wanted to emit more ­ for example by frequent flying - could buy some of the allowance of those who lived more modestly. It would not exactly be a tax - but, one way or another, people who want to have big carbon footprints in future are likely to have to pay heavily.

What is HSBC doing to help? Find out more at
For HSBC, carbon matters. The energy we use to heat, light and cool our buildings and power our IT equipment emits large amounts of CO2. So does our business travel. Increasing levels of CO2, caused by human activity, contribute to climate change and HSBC believes that climate change is the greatest environmental challenge we face this century. As a result, we:

* Measure our carbon footprint and report annually on how much carbon dioxide we emit;

* Manage our carbon footprint to reduce the amount of energy we consume. HSBC has recently committed a further £45 million over the next five years to reduce the bank's carbon footprint. The Global Environmental Efficiency Programme will enable HSBC offices worldwide to showcase environmental innovation and share best practice through a series of initiatives, involving renewable energy technologies, waste reduction programmes and employee engagement to help the bank achieve its environmental reduction targets;

* Buy green electricity. In many parts of the world, including the UK, HSBC buys electricity from renewable sources ­ generated from wind, water, the sun or biogas ­ which produces fewer or no CO2 emissions;

* Offset the remaining CO2 emissions we produce.

HSBC believes accounting for the CO2 we emit is the right thing to do. In 2005, HSBC was the first major bank ­ and the first FTSE 100 company ­ to become carbon neutral. Going carbon neutral reflects our desire to act responsibly and reduce our carbon footprint. As a carbon neutral company, HSBC will incur the additional costs that arise from buying carbon offsets to neutralise the remaining CO2 emissions we produce from our operations.

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Ethical shopping is just another way of showing how rich you are

The middle classes congratulate themselves on going green, then carry on buying and flying as much as before

It wasn't meant to happen like this. The climate scientists told us that our winters would become wetter and our summers drier. So I can't claim that these floods were caused by climate change, or are even consistent with the models. But, like the ghost of Christmas yet to come, they offer us a glimpse of the possible winter world that we will inhabit if we don't sort ourselves out.

With rising sea levels and more winter rain - and remember that when the trees are dormant and the soils saturated, there are fewer places for the rain to go - all it will take is a freshwater flood to coincide with a high spring tide and we have a formula for full-blown disaster. We have now seen how localised floods can wipe out essential services and overwhelm emergency workers. But this month's events don't even register beside some of the predictions circulating in learned journals. Our primary political struggle must be to prevent the breakup of the Greenland and West Antarctic ice sheets. The only question now worth asking about climate change is how.

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Will EU see the light?

Peter Mandelson, never far from controversy if he can help it, is at the centre of a jolly little row ... over energy-saving light bulbs.

The EU has decreed that Europeans should switch from common incandescent bulbs by 2020 as the latest as part of its "world-beating" campaign against climate change and the European Lamp Companies Federation has pledged that it will phase them out by 2015, reducing CO2 emissions by 60% or 23 megatonnes and giving consumers a €7bn (£4.7bn) windfall by saving 63,000 gigawatt-hours of juice - and 27 fewer power stations.

But there's a snag, and it's not just Greenpeace, which says they can be done away with by 2010. ("When products become trendy, markets can move very quickly to meet demand," says its Sharon Becker, pointing to digital mobile phone cameras and iPods.)

The lamp-makers are falling out over Mandy's plans to end anti-dumping duties on Chinese bulbs which push up prices by as much as two-thirds.

Osram, part of Siemens, complained to a meeting of trade officials this week about Mandy's plans to eliminate the tariffs; its fellow federation member, Philips, wants them removed. So no decision until after the summer break.

But what lies behind this spat?

The Dutch group, Europe's biggest producer, happens to import a lot of energy-efficient bulbs from China, many of them its own; so does Osram but a lot less. So Mandy's snouts smell a rat: Osram wants the duties to stay because it will hit Philips even harder than itself so it's all about market-share, really.

As if that weren't enough, America's GE and Sylvania are lined up behind the Dutch. But Osram can count on Günter Verheugen, the EU's industry commissioner and German industry lobbyist within the Berlaymont, as well as Michael Glos, Germany's economy minister.

But Philips' crucial backing may come from white knight Tesco (and other retailers, including the Foreign Trade Association which has just written to consumer minister Gareth Thomas asking him to vote the Osram proposals down).

Britain's - and increasingly Europe's - biggest grocer will buy the "green" bulbs from wherever and slash prices. That too is good for market share.

If the wheels of policy-making turn slowly in Brussels...?

In the German capital's stunning new Hauptbahnhof they won't even turn at all as traindrivers vote on an all-out strike over their modest 31% pay demand. (The German economic crisis is over so, bitteschön, let's stop penny-pinching wage-cuts).

But, at least, after years of shillyshallying and backbiting, the grand coalition government has agreed a Fahrplan for part-privatisation of Deutsche Bahn, the state-owned rail and logistics company.

The timetable will see a stake "below or around 25%" worth €3bn floated off to private investors by the end of next year at the latest - if Bundestag and Bundesrat, the two parliamentary chambers, approve (not proven).

Eventually 49% could be in free float though that is in doubt, according to Wolfgang Tiefensee, transport minister. Even so, the initial IPO would be the biggest for seven years: since Deutsche Post raised €5.8bn in November 2000.

The idea has been around for almost two decades - and delayed by fears over repeating the British experience with the rushed and botched privatisation of British Rail and its division into several businesses, with services completely separated from the network of tracks, stations etc.

The German constitution or Basic Law lays down that the infrastructure must remain in state hands and it will remain heavily subsidised (€2.5bn a year) for at least 15 years while DB will stay an integrated company. Tiefensee says: "No investor will get a single kilometre of track."

But few are convinced it will work. Critics, like Michael Bauchmüller in the Süddeutsche Zeitung, says this is the worst of all worlds, bringing no competition and no benefit for travellers.

Claus Matecki of the DGB, the German TUC, says: "The central aim of rail reform, namely putting more traffic on the tracks, risks landing in the sidings." And the upper chamber, the Bundesrat, is majority opposed.

Still, the plans suggest that Germany, with its new squeaky-clean budget, could sell off further chunks of Deutsche Telekom and Deutsche Post in the coming months. As long as none of the shares ends up in the hands of the new "locusts" - the state-controlled investment or sovereign funds so beloved of Alistair Darling.

It's only a game, isn't it?

Europe's gambling industry is on the warpath against protectionist measures to expand the scope of state monopolies in the new era of online gaming and betting that sees millions watch high-powered poker tournaments on TV screens in countless bars.

It has just notched up a victory in Danish courts which could bring further legal action across Europe and the US. A Copenhagen judge has ruled that tournament poker - Texas Hold'em in this case - is a game of skill, not chance.

The Danish Poker Association, prosecuted by the police for violating the criminal code which forbids "non-licensed" gambling in public places and for commercial gain, is celebrating.

Its lawyer, Anders Hansen of Danders & More, says this is the first time anywhere in the world that the rules of poker have been scrutinised and the court has recognised that "a poker tournament played over many hours requires a range of strategic, analytical and mathematical skills".

He points out that similar cases are pending in Holland, Germany and France.

But British lawyers doubt whether prudent, po-faced Gordon Brown will support a similar EU-wide ruling on the regulation of poker clubs after his decision to ban super casinos and UK court rulings at variance with the Danes.

And the Danish casino operators, acting against the poker players through their lobby Horesta, are even sourer now...

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Renewable energy could 'rape' nature

Ramping up the use of renewable energy would lead to the "rape of nature", meaning nuclear power should be developed instead. So argues noted conservation biologist and climate change researcher Jesse Ausubel in an opinion piece based on his and others' research.

Ausubel says the key renewable energy sources, including sun, wind, and biomass, would all require vast amounts of land if developed up to large scale production – unlike nuclear power. That land would be far better left alone, he says.

Renewables are "boutique fuels" says Ausubel, of Rockefeller University in New York, US. "They look attractive when they are quite small. But if we start producing renewable energy on a large scale, the fallout is going to be horrible."

Instead, Ausubel argues for renewed development of nuclear. "If we want to minimise the rape of nature, the best energy solution is increased efficiency, natural gas with carbon capture, and nuclear power."

'Massive infrastructure'

Ausubel draws his conclusions by analysing the amount of energy renewables, natural gas, and nuclear can produce in terms of power per square metre of land used. Moreover, he claims that as renewable energy use increases, this measure of efficiency will decrease as the best land for wind, biomass, and solar power gets used up.

Using biofuels to obtain the same amount of energy as a 1000 megawatt nuclear power plant would require 2500 square kilometres of prime Midwestern farm land, Ausubel says. "We should be sparing land for nature, not using it as pasture for cars and trucks," he adds.

Solar power is much more efficient than biofuel in terms of the area of land used, but it would still require 150 square kilometres of photovoltaic cells to match the energy production of the 1000 MW nuclear plant. In another example, he says meeting the 2005 US electricity demand via wind power alone would need 780,000 square kilometres, an area the size of Texas.

Part of the land used in Ausubel's calculations is for storage and transportation: "Any renewable energy supply needs a massive infrastructure, including steel, metal, pipes, cables, concrete, and access roads."

'Heretical demagogue'

However, other experts who have seen Ausubel’s study are highly critical, both of its conclusions and its inflammatory rhetoric.

"To have a debate on the various issues is good, but setting himself up as a demagogue with this heretical stuff, takes away from the focus and value of the debate," says John Turner of the US government’s National Renewable Energy Laboratory.

Turner says that even if the US got all of its power from solar energy, it would still need less than half the amount of land that has been paved over for highways. Further, it need not take up additional land. “We could get a quarter of our energy just from covering rooftops of existing buildings,” he says.

The same "dual use" also applies to wind power. "The footprint for wind is only 5% of the land that it covers," says Turner. "Farmers can still farm the land that the turbines are on."

Turner says looking solely at land use is an oversimplification of the issue. "I’m not sure I’d want to build one of these nuclear plants in Afghanistan, but we could certainly put in wind and solar power," he adds.

'Taboo subject'

Turner also highlights the risks of nuclear waste storage. "It has to be safely stored for 100,000 years," says Turner. "To dismiss that as a simple waiting game is totally irresponsible."

However, public perceptions of nuclear energy are changing. A new study by researchers at the Massachusetts Institute of Technology, found that 35% of the US population wants to increase nuclear power use. The figure has risen from 28% in 2002.

And not everyone disagrees entirely with Ausubel. The land argument is valid, says David Keith, of the University of Calgary in Alberta, Canada.

“I think the argument is crucial and correct and something the environmental community hasn’t wrapped its head around,” Keith says. “I don’t see any scenario where we won’t have an environmental holocaust from biomass if we rely on it for more than a third of global energy production. But this doesn’t apply to all renewables.”

Keith notes that solar power has 10 times the energy density of biomass and its cost is likely to drop as the technology advances.

Ausubel thinks he represents a silent majority of scientists concerned about renewables. “I think I’m saying what many of my colleagues know, but have felt its taboo to say,” he says.

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