Environment: Should The Carbon Tax Be Scrapped?

0:00I'm here on the job site with Dale, who's a framing contractor. Hey, good morning. Dale traded up to Geico Commercial Auto Insurance for all his business vehicles. We're here where he needs his most. Yep, they sure are. We make it easy for him to save all his insurance needs. Only one place. With coverage that fits his business and bottom line. I shouldn't have looked down. It's all right. We're with so far up here. Look at me. Take a deep breath. Ah, I'm good. So good. Get a commercial auto insurance quote today at Geico.com and see how much you could save. It feels good to Geico. The last word with life pharmacy over 100 local pharmacies nationwide that are always here to help life pharmacy live better together. John Gibbons is with us for the last word and the environment. And Johnny will forgive me at the start of the show. You heard earlier, I was going, maybe you're going to pay off your mortgage by using your EV to repower and send money back into your bank account. But I was looking at some of the figures here. And the reality is that you know, potentially it might save you from spending money. Whatever you're paying off your mortgage entirely here. Yeah.

1:00Good evening, Will. Absolutely. I mean, first of all, I guess I'm a big battery fan. I think battery technology right across the board from the large scale industrial batteries right down to the batteries in your EV. And indeed, in your power bank, maybe at home on your wall, these really are to use that old cliche. They are a game changer. And I think some of the technology that's come along, it's really pretty new. I mean, we've all heard that EVs have come down in price. We know that the range is improved, et cetera, et cetera. We know all of that. But to me, the most exciting aspect of electric vehicles is the fact that essentially there are battery on wheels and a battery with a brain. So if you've got one of the more modern EVs that chances are that you have two technologies built into that, one is called vehicle to grid and the other is called vehicle to home. So if it starts with vehicle to grid, that means you can have an arrangement with your supplier, with your energy supplier, that at peak times, right? Let's say electric hour and whoever it is, at peak times, you can agree to sell back a portion of energy

2:01in your car back to the grid. So let's say your car is an 80 kilowatt battery and you say, I'm prepared to let up to 30 kilowatts of that be instantly transferred back to the grid. Now, that might sound like a lot, but multiply that by 100,000 cars plugged in. And suddenly you're bringing online like a power station. And this is the incredible thing about distributors EV and electrical energy like this, because it can be done in a nanosecond. And if you have these contracts in place, you can basically, what it allows us to do is to either spin down existing power stations and to use a raise of electric cars, like thousands of electric cars, as virtual power stations. Incredible exciting. And you might say, well, why would I bother doing that? But that's two-year opening remarks. You do it because your grid provider, that peak electricity is really expensive. So if you save that grid provider, you can have 30 kilowatts of mine. They will give you a premium price for that. So you will make a nice little profit.

3:02It will not, I'm sorry to say pay off your mortgage, but it will certainly greatly reduce the cost of your motoring. Now, of course, if you're lucky enough to have off-street parking and a home charger, you're already benefiting from incredibly cheap motoring right now. So this is an extra benefit. So that's the vehicle to grid. The second part is really interesting. And I think there's a specially relevant will in rural Ireland. And this is called vehicle to home. That means, again, the same thing. Let's say you've got a 70 kilowatt battery in your car and the lights go out, which, of course, we're seeing more and more with extreme weather, like we saw with Stormaion where parts of the country were out for up to two weeks. Now, you have a situation where your car can continue to provide power to your house to keep vital. It won't run everything. You won't be having a disco there. What essentially a power bank is your car at them? Yes, exactly. So for example, let's say you have somebody in your house with medical needs that are powered by electricity. You can keep that going. You could also, for example, keep your freezer going, right? You won't be, as I said, you won't be powering a disc attack. You won't be really letting everything rip.

4:03But enough to keep the house ticking over for several days. Now, that's usually enough time to get through an emergency. Now, of course, if you also have solar panels connected to your house, you can be charging up that battery as you go and keep in the show on the road. So these technologies are much more applicable and much more flexible than anything we've ever seen before. So it really represents such a dramatic step change, technological. Prior to this, you had this thing outside your house. And once it was low on fuel, you had to go to a filling station and fill it up with this fuel, and that was it. Now, this is this flexible two-way street. You become to use that awful phrase, a prosumer, where you're both producing energy and consuming energy. And it also basically means that hundreds of thousands of people in Ireland in the years ahead can expect to be on that two-way energy street as however I might describe it. Yeah, well, particularly selling it back to the grid, we'll sound attracted to people who are looking at the potentially could be a $10 or $15 differential

5:05when they were breaking down the figures on this. And again, by low and sell high, if you can charge up at night and you've got your system where you can refill the car, let it go up peak times, and then potentially make yourself some money back along the way as well. And we will be talking in the next hour about the fact that there's been a big uptake in EVs, particularly with the issues in Iran at the moment as well. So that is the driver dividend. No, various calls from protesters in some media, including, he's not here, but Matt wrote about it in the business post last week, I even saw you were retweeting it or re-exing it or whatever we call it now at this stage, to scrap carbon tax entirely. You obviously disagree entirely with Matt's proposition here. I do indeed, yeah, carbon tax is one of the, first of all, nobody likes taxes. Let's be honest about that, but taxes, as they say, are the price for living in a civilized society. So let's be honest, we need taxes. The carbon tax has been particularly effective. We've had it in Ireland since 2010. It has ratcheted up nice and slowly, nice and steadily, since about 2020. At the moment, it's levied at the rate of about 71 tons,

6:08sorry, 71 euros, a ton. Now that sounds like a lot will, but in reality, for a typical car driver that works out at about three euros 50 a week, which is about the price of a takeaway coffee a week. That's your carbon tax component of your energy. Now, I know a lot of people were getting themselves very exercised in recent weeks, demanding their scrapping of the carbon tax and its ruining rural Ireland, et cetera, et cetera. In fact, the carbon tax modest thought maybe is bringing in over a billion euros a year. It's funding retrofitting, including retrofitting that is targeted at the most vulnerable home users, including people in energy poverty. So it is being used to wean us off our dependence on fossil fuels. And of course, we know in Ireland, we have a huge problem with badly insulated homes. And over a half a billion of that fund will is going towards retrofits, right? So that's one part of it. There's also about 300 million of it that is going into social welfare measures to protect people again against energy poverty.

7:09And another 170 million is going towards what's called the acre scheme. This is an agri-environmental scheme. So a lot of the opposition we've seen to carbon taxes coming from rural Ireland. But in this case, you're cutting off your own nose to spite your face. But the critical thing to understand about carbon taxes, why do we have a carbon tax? We have a carbon tax will for the same reason, for example, that we tax cigarettes very heavily. A box of cigarettes, three quarters of the price of a box of cigarettes is tax. And we do that because we want people to smoke less. This is a terrible thing. And also, cigarette smoking imposes huge social and health costs on society. So therefore, the cigarette tax helps to allay those and to deter people from smoking. Carbon taxes are exactly the same. Burning fossil fuels imposes huge costs on society. And by leving them on carbon taxes, they give people the incentive to look at other options. Now, once upon a time, it was fair to say, this could have been considered punitive. So let's say somebody listened to us today,

8:10Will, is going out to buy a car in the next few weeks. And they're thinking about it and say, I like the old diesel, right? Now, the carbon tax is giving them a nudge towards saying, well, actually, you know, that's going to go up again next year and the year after and the year after. So do you know what? The EVs are looking good this year. I'm going to make the jump, right? That's the purpose of ratcheting up progressive taxes like the carbon tax. And the good thing about it is that if for the guy who says, no, I'm sticking up my diesel, well, that's fine. At least some of the carbon tax that he's going to pay on that diesel will help to fund some positive measures to help offset some of the damage being done by that diesel. So that's why I would make the very strong argument for the carbon tax. I mean, we know, for example, that it's due to rise gradually to a hundred euros a ton by the end of the, sorry, by the end of the decade, by 2030. And again, this is a modest tax because a ton, remember, that's a ton of fuel, that's a lot of fuel. So it's not half as big a tax, a big scary tax as it sounds. But the purpose again, let's say you're filling up

9:12with home heating oil, you will feel the carbon tax in that. So maybe you should look at options like, for example, heat pumps, right? And again, the point of the carbon tax is to help support the energy transition. So let's say you buy a heat, you're thinking of a heat pump, right? Money from the carbon tax is going to a grant to help you buy a heat pump. But that money from the carbon tax is also making your home heating diesel more expensive. So that is a nudge to say to you, look, from a society's point of view, we want less oil burning and we want more clean electricity. And that's why carbon taxes are so essential. And that's why it is a huge mistake, in my view, even to consider pausing the tax, which, of course, the government have done. They're deferring. We're due to have the next round of taxing, carbon tax rises at the start of May. It's down the road to July, isn't it? Or maybe it's July, but they have deferred that. And I think that's a worry. Now, they claim it'll come back in in budget 2027, but I would be concerned that they may begin to flinch on this because there are clear signs that this is a government

10:13that whose heart is not in the clean energy transition. I was about to ask you that. I would open into the politics of all this, but this is important, obviously. It intersects with the environmental side of this, which is that both from the Galenfinafall had effectively in their election airing for the last election and said, we are still committed to this. They didn't throw the greens entirely under the bus and say, look, these were policies we brought in with the greens. We're going to totally different way. Carbon tax is going to go. They said, look, we're going to continue on with this path to 2030. I don't know if they're going to flip on it, but maybe the fact that they have kicked the can down to July would indicate that maybe they're not as committed as they once were. Yeah, I think you're right. First of all, the fact that they didn't in their program for government offer to ditch it. Sinn Fein, for example, is completely anti-carbon tax button. But I can see, I've been looked at their policy and it's, to my eye, it's just simple populism, right? Nobody likes taxes, let's dump that tax with no real solution or no real alternative to how to replace the revenue. It is important to say as well, by the way, that that carbon tax that I refer to the billion euros or so, that's ring-fenced for environmental and related topics.

11:14And it's one of the very few taxes in Ireland that is legally ring-fenced. And that's why, if we lose it, the point is this, government raising tax, raising billions is difficult. Apart from the corporation tax, which we cannot depend on, raising revenue from the general public is difficult. And woe be it on any government that throws away a relatively painless, existing tax that has met very little public wide public resistance. Yes, there are loud individual figures jumping up and down about it, but we need to be very careful, will, not to conflate these loud figures with the general public view. And the Irish public, by and large, are reasonably supportive of carbon taxes, particularly when they can see where their money goes and they realize that the carbon tax is supporting the green and clean energy transition that we so vitally need. Let's let you a matter like this when he comes back. Next time you're in, by all means, have the argument to tell you what carbon tax the waste of time should go, and you can argue back and make those exact points again

12:16and let them challenge you on them as well. John, thanks for coming in to join us. The last word. With life pharmacy. Over 100 local pharmacies nationwide that are always here to help life pharmacy live better together.