The Carbon Tax Debate

A lot of the debate on the recently introduced Carbon Tax focuses solely on the cost side of the equation, but it forgets that this tax is unique in that the revenue generated is ringfenced for use in funding specific measures – such as insulating the homes of people at risk of fuel poverty.

The purpose of the Carbon Tax, at its most basic level, is to put a levy on waste. It is widely accepted that Ireland is one of the world’s most inefficient users of energy. If we are to prepare properly for the future price fluctuations caused by Peak Oil, not to mention potential supply shortages, then we need to make urgent strides in improving the efficiency with which we use fossil fuels.

The Carbon Tax now brings this issue to peoples attention forcefully by putting a cost on energy wastage.

The initial response of most people is to say “I can’t afford this extra cost because of x, y or z reason”.

But the whole point of the Carbon Tax is to make people wake up to the fact that the cost of energy is rising, that future prices are going to be much higher than they are today, and that the only way to counteract this is to start cutting back on energy usage.

The Government have done quite a lot to improve energy efficiency in the national car fleet by linking VRT and Road Tax to the energy efficiency of the vehicle. This has led to a massive switch to vehicles with high mpg scores (and therefore low CO2 emissions). Something like 75% of new cars sold now are either Band A or Band B.

But not everyone can afford a new energy efficient car (or tractor, or truck) and the Government have not provided people with the information they need in order to get the most out of their existing vehicles in terms of energy efficiency.

I see this as a major flaw in the Government’s strategy.

If we look at Agriculture as a case study, we can see that there are huge opportunities for farmers to reduce their diesel usage and neutralise the effect of the carbon tax. Similiar opportunities exist in other areas of the economy, but for now lets just look at agriculture.

Teagasc issued a report in 2008 entitled Reducing Fuel Costs for Tillage farmers

SUMMARY

The increase in oil price, which is likely to be sustained, has an impact on production costs on tillage farms. All input prices are likely to be affected, but the cost of fuel used in farm machinery is directly affected, and is one of the few areas that growers can influence.

To remain competitive, growers must strive to reduce costs and fuel use should be targeted. There are many factors which influence fuel use which vary in scope and opportunity for cost reduction. The selection of machinery system and choice of tractors are considered in this paper.

Minimum tillage establishment systems offer considerable scope for fuel saving as the shallower cultivation system requires much less energy input per hectare. With a primary cultivation energy requirement of approximately 37% of that required by ploughing, the overall fuel use of the min-till establishment system is just 50% of that of conventional systems. This can result in a fuel saving of between €13 and €16 per hectare, with additional depreciation and repair cost savings also accruing.

There are significant differences in fuel consumption rates between tractors. Data from the OECD tractor tests allow valid comparisons to be made. Ironically the introduction of emissions regulations in recent years has increased fuel consumption by up to 30%. Differences between tractor models can also be significant with substantial cost implications for tractors with high annual use rates. Overall the choice of tractor could easily account for fuel cost differences of up to €8/ha. The choice and use of machinery can have a significant impact on fuel use and cost.

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Whilst most of the report looks at a direct comparison between a conventional plough based tillage system versus a min-till system, there are a number of issues that are of more general use.

Within prime-movers like tractors, there can be significant differences between models even though the overall design and specification are similar. These engine efficiency differences are important and should be pursued as a possible route to fuel saving. This will be considered further here.

Machine capacity or size needs to be carefully matched with other machines to be worked on the farm to allow them work efficiently e.g. it is inefficient to own a very high powered tractor for just one short power-demanding task in a season. Similarly the specification of the machine, such as the choice of tyres and ballast, can have a significant impact on fuel efficiency.

Efficient machine operation in the field can also impact on fuel efficiency. Correct adjustment and maintenance of implements in addition to correct driving technique can reduce fuel use.

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Using the appropriate machine, using an economical driving style, and using the most efficient tyre setup are factors that are relevant to drivers of trucks, vans and cars.

Silage is another major user of diesel in Agriculture. In 2004 a study was done at the Agricultural Research Institute of Northern Ireland at Hillsborough which compared a conventional Self Propelled based harvesting system with a Wagon based system.

The test compared a system using a John Deere SPFH and four Case/International Tractors with a Pottinger Torro silage wagon powered by a Fendt 716 Vario.

A comparison of two systems for harvesting herbage for silage
J. P. Frost and R. C. Binnie
Agricultural Research Institute of Northern Ireland

Wilted grass cut from a predominantly perennial ryegrass sward was rowed up and alternate swaths were harvested either by a John Deere 6850 self-propelled forage harvester (SPFH) or a Pottinger Torro 5100 selfloading forage wagon (SLFW) powered by a Fendt 716 tractor. The headland swaths did not form part of the trial. The SPFH was serviced by 3 tractors with 12t trailers and 1 tractor with a 10t trailer. The sward was cut on the 1 June 2004 and harvested on 2 June. A oneway system of traffic to and from the field was used in order to avoid congestion on the narrow farm roads.

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The fuel used to harvest and transport herbage to the silo with the SLFW was half of that required by the SPFH (0.67 vs. 1.32 l/t).

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Waterford based company Bia Cert has a carbon footprinting system for dairy farms that looks at energy usage as one of its parameters. I understand that trials of the system have shown that 10% energy savings are usually possible with just minor changes to management systems, and bigger savings can be had with small investments in energy efficient systems.

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The price of oil is only going one way. All the main political parties (Fianna Fail, Fine Gael, Labour and the Greens) agree that a Carbon Tax is the most effective, and the fairest, way of combatting oil price increases and protecting our economy, and our society, from the worst effects of high energy prices.

The money collected from the Carbon Tax is used to help people insulate their homes – particularly people on low incomes – rather than just paying higher and higher subsidies for fuel costs.

In this post I’ve given a quick overview of where efficiency savings can be made in agriculture. Similiar savings can be made in most other areas of our daily lives.

It is just a pity that the Government are not highlighting this to people so that they can find ways to counteract the additional costs imposed by the Carbon Tax.