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.
===================================================
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
|
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|
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 )
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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
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CURRENT TAXES
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Toll Tax
|
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✓
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✓
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Road Tax
|
Engine
Capacity
|
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✓
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✓
Weight
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✓
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Green Tax
|
✓
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✓
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✓
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✓
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ALL OF THESE TO BE REPLACED BY
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Trans Tax
|
✓
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✓
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✓
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✓
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✓
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✓
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✓
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✓
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✓
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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
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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
===================================================
[
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
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
