According to the officials of the ministry, the move will encourage energy efficiency, beyond renewable energy and electric transportation
Examining the consequences of the transition to a low-carbon economy on the growth of the Israeli economy shows that the implementation of a mechanism for carbon pricing does not harm the product and even maintains the growth targets; The Ministry of Environmental Protection, together with other partners in the government, will later recommend to the government of Israel the best carbon pricing mechanism
The Minister of Environmental Protection, Gila Gamliel, revealed: "We are stepping up the fight against the global climate crisis, and carbon pricing is the most effective economic tool for reducing greenhouse gas emissions. In the process, we will join the vast majority of OECD countries, which price carbon, but establish mechanisms that strengthen the environment and energy efficiency"
The Corona crisis sharpened the need for the state to prepare for crises with wide-ranging consequences for the economy and global markets. The effects of climate change are already showing their signs today, however, unlike the corona crisis that came upon us by surprise and whose impact was not necessarily known in advance, the enormous risks accompanying climate change - to society, the economy and the environment - are already well known today and we must act now to prevent them from materializing.
The cause of climate change is the excess accumulation of greenhouse gases in the atmosphere due to the burning of fuels. Therefore, many countries are working to reduce carbon emissions, and as part of the Paris Agreement of 2015, a quantitative goal was even set, according to which the increase in temperature must be limited to 2 degrees. To meet this goal, a new global economic order is required, a central element of which is the pricing of carbon emissions.
Carbon pricing is designed to solve a significant market failure, which occurs when the polluter does not pay for the damage caused as a result of greenhouse gas emissions. Carbon pricing is considered the most efficient and effective action to encourage the reduction of greenhouse gas emissions and to create certainty in the markets.
92% of the 35 OECD countries operate carbon pricing mechanisms, with the exception of Turkey and Australia, and several countries in the US. Therefore, for several years now, the OECD organization has been individually recommending that the Israeli government consider carbon pricing through the fuel excise mechanism, thus covering 80 % of greenhouse gas emissions.
An analysis of the external costs associated with the use of fuels in Israel, compared to the excise taxation, carried out by the Ministry of Environmental Protection, shows that the excise tax imposed on fuels in industry and in the power plants for electricity production does not reflect the full external costs of emissions of air pollutants and greenhouse gases. Also, in the transport fuel sector there are additional external costs, some of which are not environmental - such as congestion and traffic accidents - and the excise tax is far from covering them in full.
In addition, carbon pricing will encourage energy efficiency and a transition to renewable energy. Work carried out by the Ministry of Environmental Protection together with the Israel Democracy Institute, which examined the consequences of the transition to a low-carbon economy on the growth of the Israeli economy, found that the use of a carbon pricing mechanism contributes to maintaining the fiscal goals in such a way that the implementation of a carbon pricing mechanism almost does not harm the product and even maintains the growth targets .
Carbon pricing requires an examination of its effects, with an emphasis on the disadvantaged population and local industry, while creating a gradual mechanism that addresses these effects. In this context, it is possible to learn from the international experience of implementing carbon pricing mechanisms while defining the purpose of the mechanism's receipts, with an emphasis on reducing the economic damage involved by means of reimbursement mechanisms for the lower deciles and fiscal relief for industry. In the world, it is customary to direct part of the proceeds to investments in projects to transition to a low-carbon and low-emissions economy, such as public transportation with reduced pollution and zero-energy buildings.
The Ministry of Environmental Protection, together with other partners in the government, will examine these and other issues in depth in the coming period, consult with stakeholders in the environmental organizations and industry, and at the end of this process, it will be possible to recommend to the Israeli government the best carbon pricing mechanism.
One of the collaborations is with the Bank of Israel. Governor of the Bank of Israel, Prof. Amir Yaron: "The debate on global warming and its consequences on economic activity is taking an increasing place in the economic discourse and decision-making processes in the world. Studying the issue, and developing ways to prepare for its effects are part of the research activity at the Bank of Israel, and raising awareness of this issue is important to me. I I welcome the fruitful cooperation between the Bank of Israel and the Ministry of Environmental Protection on this issue and the hosting of the joint conference."
Many countries and the main international bodies are paying increasing attention to climate change and its potential impact on the global economy. The knowledge about the risks associated with climate change - for society, the economy and the environment - is accumulating, and at the same time the activity aimed at preventing their realization is intensifying.
The Ministry of Environmental Protection and the Bank of Israel, together with other partners in the government, will examine these and other issues in depth, consult with stakeholders in environmental organizations and industry, and at the end of this process, it will be possible to recommend to the Israeli government the best policy regarding carbon pricing.
In this context, it is possible to learn from the international experience of implementing carbon pricing mechanisms while earmarking a portion of the mechanism's receipts to reduce the economic damage involved by means of reimbursement mechanisms for the lower deciles in the income distribution and fiscal relief for the affected sectors. In the world, it is customary to direct part of the proceeds to investments in projects to transition to a low-carbon and low-emissions economy, such as public transportation with reduced pollution and zero-energy buildings.
Comments
A carbon tax is the most effective means of incentivizing the reduction of carbon emissions.
Because if you take money from us, the air will clean itself?
What does this office do except take money to lubricate its own mechanism. He brings in more than he spends and most of the expenses are inflated salaries.
Such a tax is the beginning of moral deterioration.
At the end of the day, nothing will help and the paradigm will have to change.
The word growth is problematic and as long as growth is *must* be, nothing will improve