I am pleased to announce another successful research collaboration. The prestigious Journal of Public Affairs published our practitioner paper entitled “Sustainable development and the need to reform the carbon tax”.
What makes this project unique is that this time, I and Dr. Lorenc Xhaferraj, Head of the Esharelife Think Tank, led the research activities of two interns, MA Irene Mazza- Master of Art candidate at Alma Mater Studiorum, Bologna, Italy, and MA Giuseppe Concetti – Double Degree (MSc) candidate at LSE, London, UK & Bocconi University, Milan, Italy.
I am proud of our two interns who worked tirelessly and contributed to the successful outcome of this project, which lasted about six months and provided the interns a unique academic opportunity to further expand and develop their research skills.
The researchers identified that in the aftermath of the Covid-19 pandemic, there is an excellent international momentum for an economic reset and green recovery.
In this context, there is a growing worldwide consensus that taxing greenhouse gas emissions is the only way to reduce the harms of human activities on the planet. Furthermore, taxing carbon pollution is an idea solidly grounded in economic theory.
As there is a broad consensus on the need for a carbon tax to cut emissions, and since the carbon tax has been in circulation in some countries of the world for about three decades now, the search for the right carbon tax is still going on.
I have been so vocal among the government and business circles about the absolute necessity of reforming the carbon tax, as it is paramount to achieving sustainable development and transforming our traditional economy into a circular one. As an entrepreneur, who successfully led the transformation of Tratos UK Ltd to a carbon-neutral company, I am confident, that the knowledge and technology are already available.
The carbon tax has provoked criticism and fierce discussions on how to implement it right. If implemented right, it would be a great asset in fighting climate change and boosting economic recovery and sustainable development.
The truth is, that while everyone has to pay tax, and a carbon tax is a preferred option, the truth is that some more prominent companies go to extreme measures to minimize their contribution where they are based and where they sell.
The new thinking, I have put forward in this paper, is that the new carbon tax must be calibrated against C02 levels created during production and mandatory end-of-product-life recycling.
It would put the Government on the front foot by forcing through a more enlightened and joined-up approach to understanding the ‘real’ cost of goods production. Then, that cost can be repaid, and damage repaired.
That drives two things; both are financial incentives to comply.
First, it is a very persuasive encouragement for companies to look at cleaner ways of producing and disposing of their products, and second, it is a compelling argument for making products that last longer. The tax follows the product where it is made, sold, and recycled. For a circular economy to stand a chance, this kind of thinking has to be looked at.
Tax avoidance by large corporations would be very difficult under this system, so the Government could offset the negative impacts of less affluent members of society who were faced with increased costs for some items.
Unless we act boldly on reforming the carbon tax, and as soon as businesses resume their normal activities, we are risking undoing the temporary reduction of GHG emissions and miss the achievement of the sustainable development goals.
Reforming the carbon tax is paramount to achieving sustainable development and transforming our traditional economy into a circular one. The knowledge and technology are already there. All we need is the determination to catch the momentum created by the Covid-19 pandemic and act boldly.