French Carbon Tax, EU Climate Assistance Plan, Global Lead Prices, NY Sea Level Rise

On Thursday French President Nicolas Sarkozy announced that France will impose a carbon tax effective on January 1, 2010. The tax will initially be set at a level of €17 (approximately $25) per ton for emissions of CO2 from the burning of fossil fuels. For each gallon of gasoline the tax would amount to approximately 26 cents in U.S. dollars. In announcing plans for the carbon tax, Sarkozy argued that “We cannot keep on taxing labor, taxing capital and ignore taxes on pollution.” The tax still must be approved by the French Parliament, but this is not considered to be a difficult hurdle. With the tax France will join the ranks of Finland and Sweden who introduced taxes on greenhouse gas (GHG) emissions in the 1990s. French environmentalists reportedly were dismayed that the tax was not higher. A report commissioned by the French government had recommended a carbon tax of €32 per ton that would increase by 5 percent per year until it reached €100 in the year 2030. The lower level of the tax is believed to be a response to consumer opposition to the tax, though Sarkozy announced that rebates would be provided to offset the impact on lower income groups. Sarkozy coupled the announcement of plans for the tax with a call on the European Union to impose carbon taxes on imports from countries who do not agree to reduce GHG emissions.

This week the European Union (EU) unveiled a plan to provide €15 billion per year in assistance to developing countries to help them reduce their GHG emissions. Joshua Chaffin & Ed Crooks, EU Sets out €11 Billion Climate Change Aid Plan, FInancial Times, September 9, 2009. The EU estimates that developing countries will need €100 billion per year to reduce their GHG emissions, but China’s estimates just for its own costs are more than four times larger than that. Particularly controversial was a suggestion that climate change aid from the EU may be paid for by reducing other aid that developed countries otherwise would provided to the developing world.

After soaring in response to China’s temporary shutdown of several large lead smelters, the price of lead plunged 12 percent last week on global markets. Lead closed at $2,115/ton after hitting $2,511/ton on Tuesday, an increase of 151 percent this year. It is estimated that the Chinese shutdowns will keep only approximately 60,000 tons of lead off global markets, less than 2 percent of total Chinese production. Total Chinese production of lead is expected to be 3.14 million tons in 2009.

For a fascinating report on the options New York City is considering to respond to sea level rise, see Robert Lee Holtz, New York City Braces for Risk of Higher Seas, Wall Street Journal, Sept. 11, 2009, at A15. Reviewing forecasts from various international research teams, the report notes that the city could be subject to faster sea level rise than in other parts of the world due to water density and ocean currents. Researchers are debating whether New York should consider constructing storm surge barriers to protect its low-lying port, financial district, subways and power grid.

No need to read the following paragraphs unless you follow the Washington Nationals. I am currently in Miami where I have been visiting my son who is in college here and also watching the Nats take two out of three from the Florida Marlins. On Friday I watched the Nats win their first game of the season at Landshark Stadium, a crushing blow to Marlins hopes of gaining on the Phillies for the division lead. There were probably less than a dozen Nats fans here, but we were treated politely by the Marlins fans. On Sunday my son and I had one odd encounter with a Marlins intern who offered us a free Marlins jersey if we gave him one of the Nats hats we were wearing. We refused - apparently they wanted to do a between innings stunt where they tore up a Nats cap, but none were available for sale at Landshark (my son was wearing his own custom designed Nats hat that says “D.C. Chillin’” on the back).

As the Marlins await the opening of their new stadium in 2012, Landshark Stadium (the stadium’s name has changed several times over the years - now it is named for a niche beer) is even less appealing than RFK was in the final years the Nats played there In a true Miami twist, they passed out bingo cards on Friday night and put bingo numbers up on the scoreboard between innings. Unlike the wholesome Nat Pack, the Marlins Mermaids look like a Las Vegas production number even doing bumps and grinds during the singing of “Take Me Out to the Ballgame.” Despite their diminished fan base, the Marlins have their own version of the Redskins‘ Hoggettes (the Manatees - see http://florida.marlins.mlb.com/fla/fan_forum/manatees.jsp) . It was exciting to see Ian Desmond continue his torrid Nats debut with 5 hits in his first five at bats here (I had to take a photo of the scoreboard when it displayed his batting average of .778) and to see Justin Maxwell and Pete Orr get their first home runs of the year. I must be good luck for the Nats because they have won both road series I attended (in Yankee Stadium and here) despite having a horrendous 21-50 road record overall.