Carbon tax on the horizon

A woman walks past a re-rolling mill at Shyampur on the outskirts of the capital. The government plans to slap carbon tax on polluters. Photo: Rashed Shumon

Industrialists and businessmen have welcomed the government's plan to introduce green tax for the factories that emit excessive carbon, but sought time and necessary support to introduce green technology measures.
They said the government should not sit idle just by enacting laws; it should put in place mechanisms to avail of a share in the global billion-dollar carbon credit trading.
Their comments come as the government, for the first time in Bangladesh, unveils plans for revising existing taxation laws to impose tax on individuals and organisations for emitting excessive carbon into the atmosphere.
A carbon tax is an environmental tax that is levied on the carbon content of fuels. The tax can be implemented by taxing the burning of fossil fuels -- coal, petroleum products such as gasoline and aviation fuel, and natural gas -- in proportion to their carbon content.
State Minister for Environment and Forests Hasan Mahmud has said the government seriously plans to revise the existing taxation laws to levy more taxes on those who will add excessive carbon to the air, and pollute environment.
The minister, however, did not say how the government intends to materialise its green concepts.
Bangladesh, despite being the poster child of climate change, is yet to set targets for slashing own carbon emissions, whatever they amount to, to help manage global warming.
"No doubt, we all have to improve the scenario for the greater interest of the country," said Aameir Alihussain, director of Bangladesh Steel Re-rolling Mills (BSRM) Group, the largest steel maker of the country.
He said the government should not hurry in introducing such taxes, as Bangladesh is still one of the lowest emitters. "We should be given one or two years so that all industries can introduce carbon cutting measures."
Alihussain said the government should not be content just by introducing the carbon tax. "The environment ministry should develop mechanisms to help all cut carbon emission, and at the same time benefit from carbon trading."
"It will have to convince local polluting factories to behave positively," the BSRM director said.
"The government should approach the international community and persuade the advanced nations to help us develop renewable energy generation systems by giving us technical know-how and other necessary resources."
Fazlul Hoque, former president of Bangladesh Knitwear Manufactures and Exporters Association (BKMEA), said they have agreed in principle on the initiative.
"The industries should be given a deadline to take necessary measures for cutting carbon emissions. Then it should be made mandatory for all to follow the global trends and necessities," he said.
Hoque said many factories here have already introduced various carbon reduction measures to abide by the environment laws. "But some of the pioneers have again backtracked, as they are losing their competitiveness in business due to cost differences."
He said the issue needs further discussion and debates.
Many countries have formulated a 'polluter pays' policy in the last couple of years to realise revenue from the polluting organisations to be redistributed among the yet-not-polluting firms.
Some industrialists, however, said the planned carbon taxes might hurt the businesses as production costs would go up.
"If the government introduces green tax, it will certainly increase the cost of business. As a result, the end-consumers will bear the additional cost," said Payar Ahmed Tushar, brand manager of Akij Cement.
However, Alihussain of BSRM said green business will pay dividends in the long run.
Bahrin Khan, a member of Bangladesh Environmental Lawyers Association, welcomed the move, but said there is need to specify how the taxation laws would be put into work.
"It's a global concept and the minister has initiated the idea as part of the global response to curb emission of harmful carbon. But we still don't know how the initiative is going to function," she said.
Khan urged the government to sit with all stakeholders.
Industrialists and businessman stressed 'across-the-industry' implementation to ensure a level playing field.
Experts suggested a strong policy.
"Due to policy weakness, we could not introduce green products, which are already available in the market -- be it a welding machine, a jute mill or a packaging factory," said Mostaq Ahmmed, managing director of Green Housing and Energy Ltd.
The ever-expanding use of electrical and electronic gadgets is also another factor responsible for carbon emissions, he said. Even the power plants use petroleum products that are responsible for carbon emission.
Although there are no government statistics available at the moment on the precise amount of carbon Bangladesh emits annually, Ahmmed said the figure could be two trillion tonnes.
He said the government should make it mandatory for the factories to install solar panels. "Tax exemptions could be given as incentives and easy access to bank credit has to be made available."
He said over half of Bangladesh's 160 million people still depend on kerosene lamps, another source of pollution. On an average, each person emits one tonne carbon each year.
The success in cutting carbon emission will also help Bangladesh receive carbon credit facility from the global climate change fund, he said.
AK Azad, president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), however, said the government should sit with the stakeholders before introducing any fiscal measure on carbon emission.
"Before revising taxation laws, the government should unveil the tax genres and how those will impact business," he said.
Azad said there is no way but to shift to green technology.
He urged the government to set a deadline for the factories so they can introduce measures to cut carbon emission. "Steps should be taken to create awareness among the industries instead of formulating laws hastily."
MA Rashid Bhuiyan, chairman of Bangladesh Finished Leather, Leather goods and Footwear Exporters Association, said the government should take decision on the basis of the current situation of the country.
Bhuiyan said the government has to take steps to set up clusters for every sector -- as has been done for the tanneries of the capital by deciding to shift those to Savar -- to cut pollution.
Mostafa Kamal Pasha, spokesman for the Ministry of Environment and Forests, said formulation of the law will take some time, as it will require elaborate discussion and Bangladesh does not have information on the number of factories that emit carbon.
"So, we will have to conduct a nationwide assessment," he said.

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