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14.11.2016 Views
Third Industrial Revolution Consulting Group Diesel fuel excise fees are so low that they promote “fuel tourism” with non-residents fueling up in Luxembourg to take advantage of the low fuel prices. While this policy reaps the government tax revenues from non-residents (€745 million in 2015) it is having pernicious, unwanted side effects. Traffic congestion, noise, and exhaust pollution from the diesel fumes are a daily nuisance. Luxembourg incurs an annual energy trade balance deficit because of its need to import over 95% of petroleum and natural gas products. The steep rise in transportation CO 2 emissions is proving difficult to curtail. And Luxembourg has among the highest motorization rates in the EU, and well as among the EU’s highest amount of time spent driving. Another confounding policy is Luxembourg’s vehicle registration fee, which is the same (€50) regardless of whether the vehicle is fuel sipping or diesel guzzling. Most European countries have implemented variable vehicle registration taxes/fees, based on fuel efficiency/inefficiency, fuel type, and level of CO 2 emissions. For example, the Netherlands (as well as Spain and Ireland) reduces registration fees for the most fuel-efficient cars. To register a Ford Fiesta costs €7,080, whereas a comparable priced Fiat 500 only incurs a €2,386 registration fee because it releases much lower CO 2 emissions. This similar policy practice in Ireland led to 90% of vehicle sales in lower-emission vehicle classes. Luxembourg’s one fee fits all sizes, on the other hand, has no influence on the buyer’s vehicle selection. Moreover, the Luxembourg tax regime in regards to company cars results in including a vehicle as in-kind benefits to employees’ remuneration offers. A key part of the 2016 Study on Assessing the Environmental Fiscal Reform Potential for the EU28, issued by the DG Environment of the European Commission, are recommendations reflecting the full costs of fossil fuels. The recommendations, summarized in Tables 25-4, 25-6 and 25-9, offer guidance for Luxembourg lawmakers and stakeholders. Waste Streams If there is an eye-opening reality to the loss of wealth in the linear economy, it is captured in the fact that 50 to 75 percent of all natural resources consumption becomes pollution and waste within 12 months. 305 Closing the loop, turning wastes into nutrients, reducing the need for virgin resources, and innovating through pursuit of biomimicry processes, are essential for expanding prosperity and wellbeing while collapsing waste and pollution. 305 Matthews, Emily et al (2000) The Weight of Nations, http://www.wri.org/ 358

Third Industrial Revolution Consulting Group Plastics 50% of plastics are disposed immediately after a single-use application, notably packaging, agricultural sheets and many consumer items. Plastics have grown 8.7% year after year since 1950, now amounting to nearly 300 million tons per year. The cost to the planet’s degraded natural capital alone exceeds $75 billion per year. Following the current trend, petrochemicalbased plastics are projected to account for 15 percent of the global carbon budget by 2050. 306 CHALLENGE Access to feedstock Quality of end s product (real)* Financial issues Market demand PLASTIC Recycled s plastic Biopolymers Biopolymers Recycled Biopolymers and recycled Recycled Biopolymers and recycled Source: Trucost (2015) 307 RELEVANT STAKEHOLDER Recyclers/ manufacturers Plastic manufacturers Plastic manufacturers Recyclers/ manufacturers Recyclers/ manufacturers CAUSE SOLUTION STAKEHOLDERS Low perceived value of plastic Low collectio of pl as tic at end-of-use Large scale plant matter from responsible sources Some s bioplastic ar e reported to be inferior in some qualitie Low quality feedstock can jeopardize quality in end product Cheap oil commodity prices Low volumes of processed material Distrust of benefitcl ai ms End customer not aware Quality of end product (perceived) Higher costs of plastic Consider ‘true pricing’ – imonetizng e xternalitie s of pl as ticpr oductio n , consumptio n and ndi spos al Producer responsibility n legislatio Improved access s nto recycling facilitie/ cur b side collectio Direct takeback of product –taking ownership of recovery Incorporate industrial waste product – such as lignin, a waste from pulp and paper sector. All Policy makers Policy makers Retailers/ product manufacturers Investors Academics/Researchers Contin un ed inno vatio and de velopment Investors Academics/Researchers Improve design for recycling/reuse Raise awareness of other finnci al bene fit – s tability of feedstock, brand value, n protectio ag ainst future legislatio n Develop infrastructure to achieve economies of scale at each step of value chain Avoid greenwashing by ensuring benefitof pr oduct i is scientif c ally and robustly calculated. Use a holisticassessme n t that considers potentia l trade-offs. Educate end consumers of the benefitof sus tainable s plastic t o help drive demand Improved marketin g and a wareness raising, as well uas contined development where issues do exist By improving technical issues faced in the above issues, n cost of productio of sus tainable s plastic wi ll be r educed, allowing for more competit i v e end pricing also. Original product and plastic ma nuf acturers All Academics/Researchers Manufacturers (plastic and product) NGOs Policy makers Policy makers Manufacturers All *It is important to differentiate between some existin g qual ity issues tha t have been observed during robust testin g s of pl as tic, and a per ceived inferiority of product that appears to exist due to historical performance challenges, and changes to smell and the aesthetic s of the pl as ticdur i ng pr ocessing that may make users hesitant to trust in the product. 16 306 Trucost (2016) Scaling Sustainable Plastics Solutions to drive plastics towards a circular economy, with Ocean Recovery Alliance, April 2016. 307 Ibid., Trucost (2016). 359

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