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After serving the PN for 20 years, Lawrence Gonzi refused to write the introduction to Carmel Cacopardo’s criticism of the way the eco-contribution was introduced in Malta. He then turned to Harry Vassallo.
Carmel Cacopardo’s disappointment at being rebuffed by Prime Minister Lawrence Gonzi is emblematic of how a former party stalwart feels treated by the party he gave a large portion of his life to. Gonzi turned down Cacopardo’s invitation to write the introduction for his new book: Time for Radical Change – the Introduction of Eco-Taxation in Malta. But it’s Cacopardo’s reaction that is even more significant – following Gonzi’s rebuff he turned to Green Party leader Harry Vassallo to write him an introduction.
 Cacopardo, a former Nationalist stalwart who served for 20 years of his life in the party’s executive and occupied the post of president of the Nationalist Party administrative council, regrets the Prime Minister’s decision. “I was honest with the Prime Minister. I told him that my book criticises the way the eco-contribution was introduced in 2004. He replied telling me that in the present circumstances, he preferred to decline the invitation.”
The choice of Harry Vassallo does not mean that Cacopardo’s changing his political allegiance from the blues to the greens. “I never saw Alternattiva in a bad light. My political style has always been one which welcomed positive ideas wherever they come from. I consider my book to be a continuation rather than a departure from my previous political work in the party.”
Although Cacopardo has not defected to the Greens, his new book could well serve as a fiscal manifesto for Maltese greens. The book is based on his research for his Masters on sustainability and environmental management at Staffordshire University, where he analyses how the eco-contribution was introduced back in 2004 and explores the major shortcomings in the process.
Cacopardo argues that consultation with stakeholders and conducting studies to assess the environmental, social and economic impact of any measure is essential for any measure to pass the test of sustainability. “To pass this test one has to adopt a triple bottom-line approach. If the measure fails to pass any of the three tests, it should simply be dismissed. A proposal can make economic sense but if it is not environmentally or socially viable, it is unacceptable.”
One of the main findings in his research was that no environmental impact study was conducted prior to the introduction of the eco-contribution in 2004 and that Environment Minister George Pullicino had misled parliament in to believing that such a study had been conducted. In his analysis of the parliamentary debate, Cacopardo found that the minister was asked on a number of occasions whether any studies were conducted before the introduction of the eco-contribution. He only replied in February 2005, saying that he would put these studies on the table of the House on condition that the Opposition tabled studies conducted by the 1996-1998 Labour government on the introduction of the drainage tax and other matters.
Cacopardo used his rights according to the Aarhus convention asking for access to these studies. On 4 January 2006, he was informed that no such studies existed. “The minister’s honest answer in parliament should have been that no studies had been conducted on the impact of the Eco Tax. Instead of doing so, the minister gave an incorrect answer to parliament.”
Lack of consultation was another shortcoming. “Nature Trust President Vince Attard told me that he had learned of the eco-contribution from newspapers. Martin Scicluna, former President of Din l-Art Helwa, told him that the government showed a great capacity in transforming a positive thing into a negative thing by not seeking the advice of environmentalists.”
According to Cacopardo the government lost a golden opportunity to involve environmental NGOs in such a major decision. The lack of studies and consultation resulted in the eco-contribution being perceived by the public as a financial burden rather than as a way to shift consumption to environmentally friendly alternatives. “Eco-taxation is the only kind of tax which is purposely made to encourage the public to evade it. Opting for ecologically friendly alternatives is the only legitimate form of tax evasion. A decrease in income from eco-taxation is a measure of its success as this would mean that people are increasingly opting for alternatives.”
According to Cacopardo the main shortcoming in the eco-contribution was that it failed in encouraging environmentally friendly alternatives. For example the eco-contribution on fridges did not distinguish between normal fridges and environmentally friendly ones. It is only now that the government is giving an incentive to consumers to buy energy saving appliances.
Another example where differential rating would have made a difference was the failure to distinguish between rechargeable and normal batteries. On the other hand a clear case where the eco-contribution served its purpose was the introduction of differential rates for semi-degradable, degradable and non-biodegradable plastic bags. “In this case consumption was shifted from non-degradable bags to semi-degradable bags. This was the only clear example of successful implementation as consumers simply shifted their choice from the heavily taxed plastic bags to less environmentally harmful options.”
According to Cacopardo, had proper studies been conducted prior to the introduction of eco-contribution and had NGOs been involved in the process, the same shift towards semi-degradable plastic bags would have been repeated in other sectors. Despite his criticism of the way the eco-contribution was introduced, Cacopardo argues that eco-taxation should be applied to other sectors of the economy – namely construction, agriculture, tourism and energy. He only hopes that his book opens the mind of legislators not to repeat the same mistakes.
As regards construction, Cacopardo calls for a holistic approach addressing four main issues: reducing vacant properties, shifting development to already developed areas, reducing construction waste and increasing the life span of quarries. On vacant properties Cacopardo argues that this can only be tackled through a reform of the rent laws. He is aware of the social impact of this measure but insists that the government should stop procrastinating. He also comes up with a politically acceptable solution.
“The political way out could be that of giving present tenants security of tenure while establishing a fair rent for the landlord.”
But what about low income tenants who cannot afford a fair rent? “That’s why the Housing Authority’s subsidies exist. At present we are expecting landlords to shoulder a social responsibility which should be the state’s prerogative.”
He also refers to an absurd situation where landlords who are financially worse off than their own tenants have to take bank loans to buy a new home for their family while their tenants continue paying rents established in 1914.
According to Cacopardo taxing vacant properties should be part of a package of fiscal measures addressing every stage of the construction process. “First one has to tax the extraction of stone, then impose an additional tax on demolition as well as a tax on vacant properties. Accompanied by a rent reform and if introduced gradually and simultaneously these measures could encourage more people to rent rather than buy property. These measures also help in channelling construction to already developed zones.”
On a positive note, Cacopardo welcomes the fact that MEPA statistics show that redevelopment on committed sites is on the increase. “In 2005 over 60 per cent of permitted development is being carried out on previously developed land. This is positive and should be further encouraged. We should also encourage a shift towards higher buildings.”
Cacopardo also proposed concrete fiscal measures aimed at conserving scarce stone resources and discourage construction waste. “The present charge on dumping waste in quarries is not enough if we want to really reduce construction waste.”
Cacopardo also advocates a congestion tax and other measures aimed at reducing the environmental impact of private transport. But he insists these disincentives can only achieve their aim if the public has an alternative – the only one in this case is public transport, another long neglected sector.
He calls on the government to publish the Halcrow report, a report commissioned by the Transport Ministry, which includes concrete proposals on reforming public transport. “The basic point of eco-taxation is that of creating an alternative. If one were to tax the use of cars, one also needs a fully functioning public transport system so as to encourage people to evade the eco-tax.”
The number of cars has increased from 0.33 for every person in 1986 to 0.7 for every person in 2004. This has had a sharp impact on the environment as it creates more pollution and congestion. The government intends to introduce a congestion charge as part of the park and ride scheme. The charge will be based on a fixed rate, which does not differentiate between different categories of cars.
Cacopardo notes that London’s mayor Ken Livingston has just announced changes to the congestion tax in order to introduce different tax rates, which penalise high emission cars over more environmentally friendly cars. He also agrees with shifting the fiscal burden on cars from registration to a tax on use, as hinted in last year’s pre-budget document.
“This would mean that instead of paying a registration tax as a one-off payment when buying the car, the amount paid will be spread across a number of years during which the car is in use.”
The amount paid annually will be determined according to a number of factors such as the exhaust emitted by each car.
One area where the Maltese are not used to pay for the real cost of scarce resources is water consumption. The first 33 cubic metres of water per person are subsidised heavily. Instead of paying Lm1.10 cents per cubic metre we are paying just 16 cents. It is only over and above that amount that one is expected to pay the real price. Since more osmosis plants produce half of our water, the production of water is also taxing on our energy resources. Cacopardo argues that in order to redress this problem we should simply revert to the wisdom of our ancestors. Technically it is still unlawful not to have a well in one’s home. A law dating back to 1880 states that every house must have a well. But following the construction boom in the 1960s many houses were built without a well. Practically all housing estates built in the 1970s and 1980s do not have wells.
By ignoring this age-old wisdom, the country is paying a big price. “When rainwater is uncollected, it ends up in the drainage system creating an overload at the pumping station. This results in floods.”
Tourism is one major area where the notion of environmental sustainability was only given token recognition. The Tourism Authority’s strategic plan states that tourism should be based on sustainable development. Yet the same strategic plan does not base its targets on any environmental criteria. “My query is how did we establish the 1,500,000 target? It is important that we cage the environmental impact before we establish targets. Unfortunately the targets set in 2001 were based on occupancy of hotels. ”
He also calls on the tourism industry to show a greater sense of environmental responsibility. “Some years ago the Malta Hotels and Restaurants Association had commissioned a report on the impacts of the environment on tourism. This report raises a number of valid points like the need for cleaner environment but there is also another side of the coin – the environmental costs of tourism.”
According to Cacopardo it is simply unacceptable that hotel owners are allowed to demolish hotels in order to transform them in to apartments. He argues that its time to stop the haemorrhage of land by not allowing change of use from hotels to real estate speculation. “Some of those involved in tourism know that when the times are bad they can resort to land speculation. If this possibility is removed, the environment will benefit because only those seriously interested in tourism will invest in hotels.”
Low-cost airlines could also have a negative impact on the environment. “One of the effects of low-cost on countries like France was that many British people bought property in those areas visited by low-cost airlines. The arrival of low-cost airlines could create more demand for property and thus push prices upwards.”
Cacopardi regrets that we have only considered the impact of low-cost airlines on the national airline and its impact on tourism in general. “Low-cost airlines will also have a social and environmental impact. That is why I insist that tourism targets should be determined according to environmental impacts.”
Cacopardo regrets that long-term planning is still alien to the Maltese political culture. He notes that public opinion does not react immediately to environmental impacts. “Generally our planning is restricted to four to five years. Holland’s sustainability plan plans ahead for 25 years – the span of a generation. Instead of leaving a legacy of environmental problems to the next generation, they try to alleviate the next generation of some of these problems.”
For a quarter of a century Cacopardo had worked to reform the PN from within. Nine years since he left the political centre-stage, he gives a positive assessment of his years inside the PN. “Together with George Pullicino, I insisted on the need of a code of ethics. This was introduced in the party and all levels of government.”
Still these memories kindle an expression of profound sadness in Cacopardo. “My only regret is…” – but a visibly hurt Cacopardo stops short of finishing this sentence. “I’d rather not say anything else.”
Surely, Cacopardo is critical of his former comrade over his decision to extend development boundaries. One of the major choices affecting land use was the Cabinet’s decision to open more virgin land for development through the rationalisation of development boundaries. Cacopardo disagrees. “In other countries when new zones are earmarked for development, they compensate this loss in open spaces by removing a portion of land which was previously earmarked for development.”
He argues that the government could have considered removing a portion of its own land from development zones to compensate for the inclusion of new lands.
But why did Cacopardo call it a day after serving his party for many years? “After not being elected three times, I decided to call it a day.” Cacopardo considers a return to politics to be improbable but he would not exclude it. Despite occupying key posts in the party, he never refrained from criticising the party in public. “I never found a difficulty to speak up. Some people were irked by my criticism. There were moments of tension but that did not stop them from trusting me… Just look at the different shades of opinions within the Democrats and Republicans in the USA. Just look at what happens in political parties in Italy.”
Instead of evolving towards greater internal democracy Maltese politics has somewhat become poorer in this aspect. “When I was politically active the inner party debate was externalised in the newspapers. This was healthy for the country. Open discussion does not necessarily create a disaster. An earthquake of ideas is essential for the country to grow. At present there could still be an internal debate now but surely this is not being externalised.”
Cacopardo also recently asked the Ombudsman to investigate the appointment of the new director for environmental planning in MEPA, a post for which he had applied. Cacopardo declines to comment on this issue. But would he have still written his book and made the same critical observations had he been appointed in the high-ranking post?
“Had I been appointed I would have asked for permission before publishing the book. In fact the only advantage of not being appointed is that I did not have to face this problem.”
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