Saturday, June 14, 2008

Where tax may actually be welcome

If there's only one thing good that could be said about tax, it's that it can change consumer behaviour. Drowning in a sea of 1.2 billion plastic shopping bags every year, Ireland passed a different kind of consumption tax in March 2002. It mandated shoppers to pay $0.15 for every plastic bag consumed at the register.
As a result, bag habits took a dramatic turn. Shoppers shifted to reusable cloth bags. Eventually, plastic bag consumption fell 90 per cent to only 230 million per year. So, roughly one billion plastic bags have been dislodged from the litter annually.

And since the production of bags has been reduced, about 18 million litres of oil have been saved. That's worthwhile in itself, but the good news doesn't end there. The government raised $9.6 million from the plastic tax during the first year of implementation alone, according to reusablebags.com.
Likewise, Irish retailers are reaping the benefits. They're not only earning from the sale of reusable bags, they're saving money as well. Before the tax was imposed, retailers spent $50 million a year on providing plastic shopping bags.
So, in the case of one small European country, the numbers already stack up. How do they look worldwide? What's the global commotion actually worth?
Consumers around the world use approximately 500 billion to one trillion plastic bags each year. That translates into a fairly vigorous rate of consumption, of more than one million every minute. And since a lot of them are not reused, and can take up to 1,000 years to decompose, billions of them end up in landfills, or litter the parks and beaches, or block the drains and spoil the oceans - eventually harming marine life.
Considering the danger plastics pose to the environment, a lot of countries have adopted a flurry of laws to discourage their use. Here in the UAE, groceries and supermarkets have introduced reusable bags.
Amid the hullabaloo about plastics, however, a lot of people are still using plastic bags. If banning and introducing alternative bags won't work, should taxing plastic bags be a better solution then?
Supplying plastic bags is a business expense to shops. If they start charging for them, people will think about alternatives. Eventually, shops will save money. When consumption drops, production does too. If there is less production, less oil and energy will be consumed. The fewer people use plastics, the lesser the ugly litter will be, the better for the environment. And, don't forget, tax also spells revenue.
Old habits die hard. And since plastic bags make shopping convenient and retailers are giving them away for free, consumers have more reason not to change. Maybe it takes a little push, like Ireland's plastic tax, to eventually kick that habit of mindless consumption.

Europe falls in love with America again and can’t wait for Bush to go

As George Bush limps through his farewell tour of Europe, the old continent seems to have fallen half in love with America again. This is nothing to do with Bush himself, who is still the “toxic Texan” for most of European opinion. What has won European hearts is the glamour of the American political process. The primaries are the original reality television show, with sharply defined contestants battling for the audience’s favour. Of course, Europeans do not have a say – but they do have strong opinions.

An opinion poll taken in Britain, France, Germany, Italy and Russia found, perhaps not surprisingly, that 52 per cent were rooting for Barack Obama, with 15 per cent for John McCain, and the rest undecided. The only country where McCain made a reasonable score – 24 per cent — was Russia, where elderly white men still provide reassurance.
There is now a popular view in Europe that the Great Satan will be reborn next year as America the beautiful and Europeans will march in lock step with Uncle Sam to set the world to rights. This is causing some concern among European leaders, who realise that such rosy expectations will have to be “managed down”. The transatlantic relationship has always been testy; American presidents serve their own electorates, not those of Europe.
There is, however, some basis in the feeling that the transatlantic relationship will get better. Through no efforts of his own, Bush will leave the stage with Europe far more pro-American than for many years. Thanks to the European electoral calendar, all the big four – Britain, France, Germany and Italy – now have pro-American leaders. The era when President Chirac of France and Chancellor Shroeder of Germany were in league with Syria to thwart Bush’s plans to invade Iraq has passed.
Chirac’s successor, Nicolas Sarkozy, encapsulated the change when he wore an NYPD T-shirt on holiday in the US – the clearest way to show solidarity with New York against the 9/11 terrorists.
This political alignment has already translated into a broad measure of US-European agreement on key issues. Britain, France, Germany and Russia are all working with the US to convince Iran to suspend uranium enrichment. The Bush administration has belatedly accepted the need for a Palestinian state, and is working with the Europeans, who have even agreed – unwisely – to boycott Hamas, the Palestinian Islamist movement. On climate change, one of the biggest transatlantic irritants, Bush is now talking of the possibility of a global agreement. He has even said he is sorry for the aggressive language he used about the war in Iraq.
All this ought to merit at least half a cheer for the president, but he is unlikely to get it. His image is fixed as the cowboy who can’t shoot straight and went to war against Iraq when, as the US now claims, the real threat is Iran. Of course not everything is cosy. Americans and Europeans will never agree on Iraq, or the wider “wars of the 21st century”, to use the phrase of the US historian Philip Bobbitt. The Americans believe they are at war – and are willing to sacrifice blood and treasure to defeat enemies wherever they see them. The Europeans are half-hearted at best.
This is where the enthralling drama of the US primaries bumps up against real life. No American president can afford to look “soft on terror”, nor can he allow Iran to acquire a nuclear bomb – though Iran does not claim any ambitions in that field. I do not believe that the faith placed in Obama in Europe is justified. He has enjoyed a magical political career, but is untested and has much to prove. It is painful to say it, but a US president whose second name is Hussein will have even more to prove to the American heartland when he ventures into the Israel-Palestine conflict. I cannot see him securing a just settlement there – particularly as Bill Clinton, with a far more propitious set of circumstances – failed spectacularly.
An untested president invites a challenge. This happened with John F Kennedy, who was seen by his enemies as all smile and no substance. Khrushchev, the bully-boy Soviet leader, met him in 1961 and decided he was a pushover. This prompted Russia to move nuclear missiles to Cuba and brought the world to the brink of war in the missile crisis of 1962. It is not far-fetched to see Iran being tempted to test Obama, particularly as he rashly offered to meet the Iranian president, Mahmoud Ahmadinejad, without preconditions, a position he is now backtracking from.
What sort of president achieves great things in foreign affairs without going to war? Richard Nixon, not an attractive figure by any standard, achieved détente with the Soviet Union, negotiated a ceasefire in Vietnam and opened up relations with China. For an old Cold Warrior, this was a hat-trick of betrayals, but it was the right thing to do.In two words, what is needed is a pragmatic hawk. John McCain has nothing to prove to the hawks. His pragmatism is demonstrated by his clear rejection of all forms of torture, even in the pursuit of the war on terror.
If hawks are so successful, why then has Bush not pulled off a series of diplomatic coups? The secret, in the words of Bush’s former press secretary, Scott McClellan, is that he has no intellectual curiosity. For him, the words “enhanced interrogation techniques” did not suggest torture and a slippery slope that would taint America’s moral leadership in Guantánamo Bay and Abu Ghraib.
It is understandable that the Europeans should yearn for the ultimate anti-Bush candidate. But they should be careful not to get what they wish for. America is not going to be reborn as a result of the election in November. Its goals will be not dissimilar to those of today. What is needed is someone competent to repair the mistakes of the Bush era.