Some carrots, but no sticks: Budget 2020 on climate and the environment

Cut-off date for fossil fuel engines and 2050 deadline for carbon-neutral Malta, but can businesses get their act in order without being pushed?

In line with heightened international awareness on climate change brought to the fore by activist Greta Thunberg admonishing world leaders to get their act in order, the Budget comes with a clear commitment to introduce a cut off-date for the im-portation of petrol driven cars next year along with some other incentives, some of which repackaged under the climate change brand.

With the latest figures showing carbon emissions shooting up by 28% over 2005 as a result of increased car use, the government will be announcing a date for ending the importation of petrol and diesel driven electric cars next year as part of a climate action strategy.

The budget’s declaration that the government is “determined to make Malta one of the first countries in Europe to switch its vehicles to electric cars” suggests the adoption of an early date. So far different countries have opted for different dates ranging from Norway which has opted for 2025, Sweden, Ireland, the Netherlands, Iceland and Denmark which have opted for 2030 and the UK and France both of which have opted for 2040.

While the shift to electric cars will inevitably result in a decrease in emissions in the long term, one major problem the strategy has to address will be that of avoiding a spike in sales of cheaper petrol-driven cars immediately before the changeover to more expensive electric cars, even if the price of the latter is expected to fall amidst increase in demand.

The budget also includes supportive measures for the shift to electric cars, including the introduction of a residential charging fee for low emission vehicles at €0.1298 per unit.

One key issue will be the availability of charging points and whether these will be mandatory in future building developments. The budget also refers to the installa-tion of 200 charging pillars for electric cars. Gradually all fuel stations will be provid-ing gas and charging points for electric cars.  

The budget also includes grants of up to €1,500 for the scrapping of old vehicles and €200 for the conversion of petrol fuelled cars to natural gas.

For the first time the budget timidly refers to the emissions from the cruise liner industry envisaging “upgrades” in line with the climate action strategy. According to a report compiled by BirdLife Europe’s “worst-polluting cruise ships” will have made 122 calls to Malta during 2019, compared to 33 calls by cruise liners equipped with technologies for reducing air pollution.

Moreover the national strategy to achieve carbon neutrality by 2050 will be present-ed in a national strategy in the next months.

Carbon neutrality entails a balance between activities that emit climate pollution and processes that reduce the impact of that pollution to zero or close to zero. The EU set the ambitious 2050 target earlier on this year. It is hard to imagine achieving this target without any disincentives on excessive carbon footprints.

The construction industry, which globally accounts for 8 per cent of carbon emissions and whose impact on quality of life has increased drastically in the past few years, will be encouraged to invest in more environmentally-friendly machinery that de-creases pollution through grants up to a maximum of €200,000.

Yet the budget does not hint at any economic vision addressing the impact of the current economic model characterised by endless construction except for saying that the newly created regulatory authority will also address the impact of the industry on the country’s cleanliness.

What comes around goes around

The most innovative incentives included in the budget are those related to that in-centivising circular economy. These include a 50% grant, up to a maximum of 3000 to businesses that establish green corners, where customers are encouraged to bring their containers to be filled by weight.

The bottle and container return scheme already committed in three previous budg-ets, is to be introduced by the end of 2020. Water fountains, which effectively serve as an alternative to plastic bottles, will be introduced in all schools. In line with the strategy against single use plastics; plastic bags, cutlery, plastic plates and straws are to be completely banned from the local market by January 2022.

Renewable energy will be incentive through a grant to cover 25% of the cost (up to a maximum of €1,000) for batteries to store electricity. The measure will be applica-ble to those whose feed in tariff contract has expired.

Further incentives such as grants for PV panels, feed in tariffs and better insulation for houses will be rolled over as port of the forthcoming climate action strategy.

While no measures are envisaged to clamp down on ground water extraction, the budget promises greater investment in water infrastructure.

This includes investment in the new network for recycling water provided to farmers which is also aimed at decreasing pressures on ground water extraction.

The €130 million investment in water infrastructure is also expected to reduce ener-gy consumption of reverse osmosis plants. The budget falls fails to mention the Wa-ter Services Corporation’s plans to improve water quality to the extent of making tap water a more palatable alternative to bottled water which is currently given out for free by supermarkets.

While budget reiterates the commitment for major infrastructural works including the Gozo tunnel, the controversial Central Link project and the new Paceville net-work, the budget also includes some incentives for the use of public transport. This includes the introduction of free public transport for over 75-year-olds which will complement free public transport for 14 to 20-year-olds. This is being framed in the government’s ultimate goal of making public transport free for all.

One notable absence in the budget is any reference to the growing construction waste problem and solutions to address it. Neither does the budget refer to land reclamation, which is being considered as an option to address this problem by the government.

Calls will also be issued for concession on maritime connection for Cottonera, Marsxlokk, Marsaskala, St Paul’s Bay. St Julian’s, Mellieha and Valletta. A VAT re-fund of up to €400 will be given for the purchase of bicycles, pedelec and bicycle racks.

The budget includes no directives to limit the urban sprawl but does restate the government’s commitment to double the open area of the Ta’ Qali National Park (which will also house the National Archives) and to convert the roof of the Santa Venera tunnel in to a green open space.

In line with the government’s commitment not to raise any taxes the budget in-cludes no environmental or carbon taxation aimed at changing behaviour and busi-ness practices to more ecologically friendly ones. The use of the carrot instead of the stick ensures that people are not alienated from a climate friendly agenda which is still associated with grants and incentives.

But it remains to be seen whether carrots alone will work to achieve a carbon neutrality by 2050 and whether business can get it act in order without being pushed.

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