‘Exempt’ to pollute? No thanks

The discussion about public borrowing and taxation, perfectly legitimate and useful economic instruments, is unfortunately, more often than not mired in simplistic populist tit-for-tat playing on the ingrained fear of ‘indebtedness’ in the general public.

The arguments regarding public borrowing and taxation should be turned on their heads. The focus should be on the outcomes of the borrowing, the behavioural changes brought about through targeted taxation, and long term investment possible from income otherwise stashed away by those who benefitted most from the current economic system.

The arguments in Malta, made by either the Nationalist or the Labour parties are well rehearsed. They in fact take it in turns, using the same arguments over and over again depending on which one of them is in government and in Opposition. The discussion at a European Union level, including in the European Parliament, about EU economic rules at the moment brings to the fore the different attitudes to public borrowing and taxation. Used wisely public borrowing can, and I argue, should be an instrument of longterm investment in the necessary green economic transition. The long term benefits vastly outweigh the risks. The same can be said for taxation. Taxation can be used as an instrument for transferring extreme wealth, made through milking the skewed economic system and by polluting our future, to society. Unfortunately, there is little to no space in the public arena for discussing these important and pressing issues.

A case in point is the necessary, useful and effective EU Emissions Trading Scheme (ETS), operational since 2005, with shipping, the cheapest, most unregulated and hence dirtiest form of freight transport around, being included in the scheme as of now, 2024. ETS is an auction trading in pollutants, including carbon dioxide and toxic gases. Shipping was exempt. However, it was then already clear to all that this was a mere postponement giving everyone the chance to get “our house in order”.

It is emblematic of the attitude of big business – shipping companies are huge multibillionaire businesses – to take the ‘do nothing’ approach, until they are forced by legislation to clean up their act. There is surely a lack of information forthcoming from the government regarding preparation for the inevitable and necessary changes at the Malta Freeport Terminals. It too must also face up to its responsibilities and either operate in a cleaner manner, to the benefit of us all, not less the long suffering people of Birżebbuġa, not to mention the massive pollution by cruiseliners in the Floriana-Valletta and Cottonera harbour area. Face up to your responsibilities or cough up the money for the necessary transition.

Recently a whole hullaballoo by the uninformed – not that government made any attempt at providing information – tried to suggest that Malta should be exempt from shouldering its reponsibilities. Ridiculous arguments about 40% rises in food prices are a misrepresentation of the facts, if not downright lies. EU documents show that the portion of costs attributable to ETS is inconsequential. ETS is effective because of the huge amounts of freight carried by billionaire companies, in whose interest it is to change and keep their costs down, but only if forced to do so. The issue of transhipment is a seperate issue. There are various solutions.

First of all, we must keep in mind that the Malta Freeport Terminal is operated by a company in which a major shareholder is one of the biggest, richest freight companies in the world. To suggest that we should exempt these companies from responsibility when it comes to the global climate and environmental crises is crazy. Secondly, the assumption that this company is going to sit pretty and not keep up with developments in the industry is ridiculous. In fact, according to its website, freeport terminal shareholder CMA-CGM already boasts of its decarbonisation efforts and its current and planned reductions of carbon emissions ‘by 10% to over 84%’. The ETS charge will, of course, decrease with a decrease in emissions. The plus side is that this does not only mean the reduction of carbon dioxide emissions but also that of toxic gases such as nitrogen oxides and sulphur oxides. Thirdly, yes, a just transition programme for any reduction in workforce is imperative, new niches must be explored, in which to use the skills of workers. That is what Germany has done and is doing in preparation over the years of the closure of its coal mines.

There are various funds to tap into, not least the revenues generated by the ETS itself which will support the decarbonisation of shipping through an “Innovation Fund”, and with a portion of the revenues also going to member states, to cover measures to decarbonise the maritime sector, including ports. Government should inform us of its plans in the shipping sector and how it plans to tap this income for the benefit of affected workers.

The writing is on the wall, change is inevitable. To date the European Emissions Trading System helped reduce greenhouse gas emissions from the participating energy sector and energy-intensive industries, by 29%.

Given the increase in electricity generation in the EU since 2005, this is a massive reduction. We need to get to zero – so much more work needs to be done. ETS is not the only tool available for decarbonisation, but it is a tool which works.

Spreading misinformation and outright lies is irresponsible and dangerous. It would mean that our ports become a magnet for the dirtiest, most polluting ships around, polluting our air. Malta, a major shipping flag state would ironically be the world capital of ‘dirt’. What is more sinister is that this misinformation actually helps the biggest, richest companies and their shareholders, and plays into the hands of the destructive fossil fuel industry and polluters.

Ralph Cassar
ADPD Secretary General
Published in The Malta Today – 18 January 2024

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