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Vehicle, carbon tax to be introduced to tackle climate change

Introduction of vehicle tax and increase of the costs of importing secondhand vehicles are part of the future measures that would reduce gas emissions causing a greenhouse effect in North Macedonia. These measures are envisioned by the new environmental law.

Skopje, 23 December 2019 (MIA) – Introduction of vehicle tax and increase of the costs of importing secondhand vehicles are part of the future measures that would reduce gas emissions causing a greenhouse effect in North Macedonia. These measures are envisioned by the new environmental law.

They aim to completely replace the fleet of vehicles, having in mind that transport is one of the main sources of pollution in North Macedonia, alongside the energy sector, waste, and construction.

The environmental law, which is within governmental procedure, is expected to be debated in Parliament soon.

Ana Petrovska, State Secretary at the Ministry of Environment and Physical Planning, has said the Ministry had decided to take some unpopular measures that would renew the fleet of vehicles, especially with regard to increasing used vehicle import costs.

Import of secondhand cars can harm the environment

Petrovska told a panel in November, titled “Climate Action: Prevent and Cure”, that this measure will not seriously affect the social standards of the citizens, instead, it it will pinpoint the negative effect of importing secondhand vehicles on air quality and climate changes.

“A vehicle tax will enter governmental procedures soon. This law replaces the Law on Excises, which stated that the value of the vehicle determines the cost of the excise. The new formula involves the CO2 emissions factor. It means that these measures will influence the gradual replacement of the fleet of vehicles. The income garnered from these taxes will be in favor of increasing investments towards the reduction of climate change,” Petrovska said.

The Ministry of Environment and Physical Planning is currently working on a Climate Action Strategy and a Climate Action Law – two mutually linked documents, which will demonstrate the ways in which all EU climate change directives will be gradually implemented.

The Energy Strategy, the first-ever green strategy in North Macedonia, has been published.

Decarbonization leads to a better, more sustainable economy

The three predicted scenarios – basic, moderate and green – show for the first time that the use of coal by REK Bitola, one of the major contributors to the overall greenhouse gas emissions, is no longer sustainable.

Petrovska pointed out that implementing the emissions control measures, as well as introduction of a carbon tax, will turn penetration of renewable energy sources and gas into a more sustainable solution, gradually making coal obsolete.

“Decarbonization doesn’t burden the economy. It makes it better and more sustainable. New technology and innovations that are crucial for the climate will allow us to generate new, green workplaces,” Petrovska says.

According to her, North Macedonia is ready to implement the carbon tax, which has been already introduced in developed countries, because “economic instruments are an alternative to commands, which are defined as prohibitions, and have proved themselves successful”.

“I believe that our society is ready to implement a carbon tax to stimulate those who are involved in greenhouse gas emissions to take urgent action, as well as garnering additional funds to be used for climate action measures,” Petrovska stresses.

EU sets an example – carbon taxes lead to greenhouse gases reduction

Regarding carbon taxes, Nikola Popovski, university professor who served as finance minister, said that the EU collected EUR 370 billion from ecotaxes, which translates to 2.4% of the members’ GDP, or 6.1% of the overall public revenue of the Union’s 28 member-countries.

This tax policy is effective, as confirmed by Eurostat data, according to which, EU gas emissions were reduced by 22% between 1990 and 2017, which is 1,240 billion tons of CO2 less.

The EU spends more than it charges for environmental protection – 2-2.1% of the GDP, which is around EUR 300 billion. In comparison, North Macedonia’s GDP is EUR 11 million. That’s 30 Macedonian GDPs that the EU takes aside for environmental protection.

Popovski adds that ecotaxes amounted to EUR 180 million in 2017, which is 1.9% of the GDP, and it is 0.1% more in comparison to 2016, which means that taxes are rising.

Almost 99% of funds come from energy sources and transport taxes. According to Eurostat, North Macedonia has been increasing CO emissions according to 2006-2012 data. According to the State Statistical Office, the greenhouse gases emissions in North Macedonia has reduced by 30% since the 1990s.

One possible solution, according to Popovski, is the IMF’s suggestion, which regards carbon taxes as the most powerful and efficient solution to further reduce greenhouse gases emissions, because they enable citizens and companies to find an alternative way to satisfy the needs offered by coal products, at the lowest costs.

“Of almost 200 countries in the world, only 46 have been using carbon taxing. North Macedonia should implement this, because local level benefits are enough to justify the carbon taxes and the higher prices we should be paying. This means that North Macedonia shouldn’t evade this. Future green economies and societies, which we strive to become,should fund producers and users of carbon oxides without exceptions. Those producing CO2 should paying more,” said Popovski determinedly.

Ecotaxes should be turned into environmental protection expenditures

When asked how funds from ecotaxes are spent in the country, Popovski stressed that the taxes that are being paid are spent wherever the government tells Parliament to spend them.

“It would be good if the taxes were to be used where necessary, but only if the government were to take care of them and turned them into environmental protection expenditures,” Popovski said while commenting on the announcement of a CO2 vehicle tax introduction.

Temperature could rise by 6 degrees by 2100, according to climate change forecast.

The Paris Agreement states that every signatory country, including North Macedonia, is obligated to take action and reduce greenhouse gas emissions which would lead to a temperature rise of no more than 2 degrees.

According to climate scenarios, the mean yearly temperature in North Macedonia will increase by 1.9 degrees Celsius by 2050, and rainfall will reduce by up to 23% by the year 2100.

Water availability will be limited, and droughts and sudden flooding will be more frequent, having stronger effects. The negative effects of climate changes will reduce yields of most agricultural produces, which will affect people’s health.

The dangers brought by climate change will cause agricultural, health, tourism and biodiversity problems.

These harmful effects can be reduced by measures which create new green workplaces.

Nonetheless, the severity of the consequences will depend on the ability of the country to prepare for and deal with climate change.

Violeta Gerov

Translated by Dragana Knežević

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