Taxing the Polluters

 

 

It goes like this :

Carbon Emission > Pollution > Global Warming > Climate Change > Floods > Droughts > Famine > Deaths

 

What can be a Solution ?

Ø  Punishing  people / industries increasing “ Pollution “

Ø  Rewarding people / industries  reducing “ Pollution “

 

How ?

Ø  Heavily taxing those who contribute towards increase in pollution

Ø  Lightly taxing  / No taxing / Giving money to those who help reduce pollution

 

Any specific proposal ?

Yes . And from none other than Dr Raghuram Rajan ( Former Governor – Reserve Bank of India )

At the WORLD LEVEL ,

Dr Rajan [ Raghuram.Rajan@chicagobooth.edu  ) , has proposed :

 

A Climate Action Plan  /  TOI  /  23 Feb 2021

Extract :

Ø  Economists generally agree that an important way to reduce carbon emissions is to tax them. But the changes those taxes bring about will, by design, be disruptive in the short run

 

Ø  Indians, however, believe there’s profound inequity in asking,

      #    India, which has a per capita emission of 1.8 tons of CO2 in 2017, to bear the same burden as the

     #     US (16 tons per person), or

     #    Saudi Arabia (19 tons).

 

Ø  Yet, the least costly way of reducing global emissions would be to give everyone similar incentives – India should not build many more dirty coal plants as it grows, and Europe should close down the plants it already has

 

Ø  The economic solution is quite simple:

 

      #     A per-ton carbon levy called the Global Carbon Reduction Incentive (

              GCRI ).

 

     #    Every country that emits more than the per capita world average (5

           tons) would pay into a Global Incentive fund

                      

    #    This annual payment would be calculated by multiplying,

            >    excess emissions per capita , by their

            >   population , and the

            >   GCRI ( $ 10 / ton )

.

 

Ø  # If we started the GCRI at $10 per ton, the US would pay around $36 billion while Saudi Arabia would pay $4.6 billion. Countries below the global per capita average would receive a commensurate payout – Uganda would receive around $2.1 billion, while populous but low-emitting India would get $41.6 billion.

 

Ø  Every country faces a loss of $10 for every ton by which they increase per capita emissions, whether they are at a high, low, or average level today. So India has the same incentives to economise on emissions as the US

 

Ø  Ideally, each country, including recipients, would decentralize GCRI through a domestic carbon tax, which may be set at a higher level

Ø   

Ø  The tax would set developing countries on the right emission path, rewarding their investment in renewables, while discouraging coal.

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Following Tabulation shows how Dr Rajan’s proposed GCRI [ Global Carbon Reduction Incentive ] will work out

===================================================

 

	A	B	C	D    = B - C    ( Net )	E	F = AxDxE ( Populatio ) x ( Net ) x ( $ 10 )
Country	Population ( Million )	2017 per Capita CO2 Emission ( Tons )	2017 world ave per capita CO2 Emission ( Tons )	(-) to receive GCRI (+ ) to contribute	CGRI proposed by Dr Rajan $ per ton		CGRI   $ Million
Uganda	44	0.14	5	0.14-5  = ( - ) 4.86	10	44x(-4.86)x10	2138 ( Get )
India	1370	1.80	5	1.80-5  = ( - ) 3.2	10	1370x(-3.2)x10	43840 ( Get )
China	1400	7.18	5	7.18-5  = ( + ) 2.18	10	1400x(+ 2.8 )x10	39200 ( Give )
USA	329	16.0	5	16.0-5  = ( + ) 11.0	10	329x(+11)x10	36190 ( Give )
S Arabia	35	19.0	5	19.0-5  = ( + ) 14.0	10	35x(+14)x10	4900 ( Give )

 

  

Can  you give some examples at  NATIONAL LEVEL  ( what Dr Rajan calls :  Domestic Carbon Tax ? )

Yes , take a look at following tabulation ( not comprehensive / only illustrative )

===================================================

Polluting Industry :   TRANSPORT

Factors Considered for Computing Taxes Payable by Vehicle Owners

===================================================

Factors	Energy Source / Petrol Diesel Hybrid EV	Ownership Private / Public	Purpose for :   People/ Goods/ Agri Use	Vehicle Age   8+   yrs 15+ yrs	Type   2 Wheel 3 Wheel 4 Wheel	Capacity   1 person 4 person Many	Roads Used /   City Highways	Time of Usage   Peak  or Off-Peak	Status   Parked Or Running
CURRENT TAXES
Toll Tax					✓		✓
Road Tax	Engine Capacity			✓	✓ Weight	✓
Green Tax	✓	✓	✓	✓
ALL OF THESE TO BE REPLACED BY
Trans Tax	✓	✓	✓	✓	✓	✓	✓	✓	✓
Factor Weight	15	10	5	5	5	5	25	5	25

 

 

How much will these taxes earn the Government, each year ?

 

[ A ] …. Toll Tax 

            Rs  54,750 Crore / year ( assuming daily collection will reach Rs 150 cr by

            end March 2021 )

 

[ B ]  …..Green Tax

             Rs   3,000 crore ( for 2021 ) , assuming :

             #   Total vehicle population in India , as of Dec 2020  =  300 million

             #   Of the above, OLD vehicles attracting GREEN TAX =   30 million

             #   Green Tax to be collected per year per OLD Vehicle = Rs 1,000

             #   Total collection for 2021 = Rs 1,000 x 30 million = Rs 3,000 crore

 

ASSUMING :

Ø  Number of old vehicles in Jan 2021 =    30  million

Ø  New vehicle sale per year               =    20  million

Ø  Vehicles getting “OLD “ each year   =    10 % of opening population 

       

Year	Opening Population ( Million )	Added during Year (new)	Year-End closing balance		( Less ) Scrapped during year	Giving Year-End Total Vehicle Population	10 % of Opening Population ( New Addition )	Carried Forward	No of  vehicles which would attract GREEN TAX ( New+carried Forward )
2021	300	20	320		10	310	30	30	30+30=60
2022	310	20	330		10	320	31	60	60+31=91
2023	320	20	350		10	340	32	91	91+32=123

 

Assumptions made above may not be accurate. But, with all the inaccuracies, following generalizations seem safe :

Ø  New vehicle production would be much more than 20 million / year , assumed

 

Ø  Scrapping of OLD vehicles would be much less than 10 million / year , assumed

 

Ø  This would mean that the number of vehicles liable for GREEN TAX would be substantially higher

 

 

[ C ]……   ROAD TAX :

 

Each State has widely differing rates of Road Tax ( either a big lump-sum collected once during first sale by a dealer , or a smaller amount every year ) . Several factors are taken into consideration for calculating Road Tax , making it a complicated exercise

For sake of simplification, I assume that ( on an ave ) , road tax would work out to 10 % of the  sale price ( at dealer )

Taking auto industry value at $ 118 billion ( Rs 8,52,314 Crore ) , road tax ( all states put together ) , could be as much as Rs 85,231 Crore )

 

Summarizing :

Ø  Toll Tax…………………..Rs   54,750 Cr / year

Ø  Green Tax……………….Rs  10,000 Cr / year ( by 2023 ) – and rising by the year

Ø  Road Tax……………..   Rs  85, 231 Crore / year now possibly rising by 10 % per year

 (                               Industry Growth rate

===================================================

Total Taxes …………………………  Rs  1,49, 981 Crore / year

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[ D ] …. TRANS-TAX

In my suggestion  ( Transport : an Integrated Logistic Plan ? ), based on the HARM QUOTIENT generated ,

 

Ø  More polluting ( ICE + PRIVATE ) vehicles, may end up, paying Rs 100 / day

 

Ø  Less polluting ( EV + Public Transport ) vehicle, may end up paying only Rs 10 / day

 

Let us assume an ave Trans-Tax of Rs 30 / day = ( approx. )  Rs 10,000 per year per vehicle

Now, we have 300 million vehicles. That would amount to collection of :

300 million x Rs 10,000  = Rs 300,0000 million = Rs 300,000 crore  = Rs 3 Lakh*crore

This is twice of ( Toll Tax + Green Tax + Road Tax ), being collected currently  !

 

Dear Shri Gadkariji,

Beauty of my proposal is :

Ø  It will replace complicated ( TOLL TAX + GREEN TAX + ROAD TAX ) with just one tax

Ø  It will be an AUTOMATIC ( no-human intervention ), FASTag based debit system ( 24x7 )

Ø  It will be NaviC satellite tracking based

Ø  No need for millions of vehicle owners to fill in COMPLIANCE FORMS ( even if, online )

Ø  It will promote LESS POLLUTING TRANSPORT with less congestion

Ø  No need to incentivize EV manufacturers or subsidize EV buyers

Ø  It will be an UNIFORM , ONE SINGLE vehicle-taxing system for entire country

Ø  With liberalization of GEO-SPATIAL DATA sharing / utilizing , no more technical hurdles

 With regards,

Hemen Parekh  /  hcp@RecruitGuru.com  /  25 Feb 2021

===================================================

References :

Toll Tax

Get FASTag for free at toll plazas till March 1  

FASTag drive toll collections to record Rs 102 cr

Green Tax

Gadkariji : Green Tax is Good ……………….[ 26 Jan 2021 ]     

 

Trans Tax

Transport : an Integrated Logistic Plan ? ……….[ 20 Nov 2018 ]

 

https://www.investindia.gov.in/sector/automobile

The $118 bn Automobile industry is expected to reach $300 bn by 2026.

https://www.bankbazaar.com/driving-licence/rules-regulations-of-road-tax-india.html

 

eCourts are OK ; why not e-Voting ?

 

 

Context :

SC notice on plea to allow OTP-based E-vote, expanding postal voting overseas  /  ET  / Feb 19

 

Extract :

Ø  The CJI was initially skeptical of his plea. “What kind of plea is this ? Sitting in England you want to vote here ? If you don’t care enough to go to your constituency, why should the law help you ?”

 

Ø  The CJI then wondered if the government and Parliament have the power to fix a voting place.

 

Ø  Advocate Kaleeswaram Raj conceded that the government indeed enjoyed such power. There was no change in the law as yet and “ballot papers remain restricted to a small” segment of the population, he argued.

=================================================

NOW FOR A CONTRAST , read this :

 

SC is a global leader in Virtual Hearings amid pandemic   /   TOI   /  22 February 2021

 

Extract :

 

Ø  The Indian judiciary achieved a record of conducting 66.85 lakh case hearings through video-conferencing

Ø  The Supreme Court, according to the Law Ministry, became the global leader with 52,353 virtual hearings during the period

Ø  The court has already advised High Courts to ensure use of eCourts System such as e-Filing and sending out court summonses trough TEXT MESSAGES and EMAILS to registered litigants

 

Ø  Number of cases heard using VIDEO-CONFERENCING :

 

           #   High Courts……………………… 20.6  lakh

           #   District Courts……………………45.7  lakh

           #   Supreme Court………………..  52,353

 

Ø  Virtual Courts set up……………………………. 9 courts in 7 States ( to try Traffic offenders )

 

 These courts heard 42 lakh cases and realized Rs 140 Crore in fines

 

Ø  Delhi High Court recently started 34 DIGITAL COURTS to hear cheque bounce cases

 

Ø  Increase in Pending Cases ( from Dec 2918 to Jan 2021 ) :

 

#   Subordinate Courts ………………… 2.9 crore to 3.7 crore

 

#   High Courts………………………………..49.8 lakh to 56.6 lakh

 

#   Supreme Court…………………………  58,000 to 65,000

 

===================================================

 

 

SOME MORE CONTRAST :

 

Ø  SC gears up for live streaming of sessions  /  04 Nov

Extract :

Ø  The panel set up by the E-Committee will give its report on four important aspects,

      #  Infrastructure required for LIVE STREAMING of proceedings from all HCs

          and nearly 20,000 trial courts

          #  Funds needed for this gigantic project that will have to be broken up

              State-wise

     #  Software suitable for this endeavor

     #  The Central assistance required through budgetary allocations

=================================================

AND SOME MORE CONTRAST :

SC: CCTVs must in offices of CBI, ED, Police Stations  /  HT – 03 Dec

 

Ø  In 2018, the court had passed a judgment for bringing all police stations under the surveillance of the CCTV cameras to check human rights abuses. For this purpose, all states were required to constitute independent committees that could study CCTV camera footages and periodically publish reports of its observations.

Ø  Extending the ambit of its 2018 order, the top court maintained that not only police stations but all the other agencies, which have the power to make arrests and interrogate, must also have CCTVs and recording devices installed in their premises. Therefore, the bench headed by Justice Rohinton F Nariman directed the central government to get CCTV cameras with audio-recording facility installed in the offices of CBI, ED, NIA, Narcotics Control Bureau (NCB), Department of Revenue Intelligence (DRI), Serious Fraud Investigation Office (SFIO) and all such agencies.

===================================================

Dear Hon CJI,

If a voter can walk down to the poll booth (where he is registered ), he would gladly do so , if he is keen on exercising his vote . On the other hand, if a citizen does NOT want to vote, he won’t even if he is in a building adjoining the polling booth

But a majority of our 300 million voters who are UNABLE to vote because they are, currently living a few hundred km away from their polling booth, do want to vote

Over the past 2 / 3 years, Supreme Court has issued significant directives to all concerned, to speed up delivery of justice by taking help of INFORMATION TECHNOLOGY / DIGITIZING of JUDICIAL PROCESSES

I urge you to accelerate this process by “ directing “ ,

Ø  Central Government

Ø  State Governments

Ø  Election Commission …. Etc.,

- to consider implementation of MOBILE-BASED voting as suggested at :

How about “ Sandbox for Mobile Voting “ ?................[ 27 Nov 2020 ]

Vote from any centre …………………………………………………..[ 25 Jan 2021 ]

 

With regards,

Hemen Parekh  /  hcp@RecruitGuru.com  /  22 Feb 2021