viernes, agosto 10, 2012

Taxed energy: thought Occupiers aren’t expecting, but will love

Note: the following text is an adapted translation of the article Energía con impuestos: pensamiento que indignados no esperan, pero adorarán, published in weekly column “Systemic Leadership.” The translation does not include hyperlinked material which remains in Spanish.

In the story "The 15-M is emotional, lacks thought," published in El Pais, October 17, 2011, Zigmunt Bauman, Polish philosopher and sociologist known for his concept of liquid modernity, said of Occupiers that:

"The movement grows and grows but ‘it does through emotion, lacking thought. With emotions alone, without thought, you don’t get anywhere.' The uproar of the collective emotion plays a carnival show that ends in itself, without consequences. 'During the carnival anything goes but ended the carnival with a business as usual comes back.'"

Taxed energy would be, for example, at the crux of the Dominican agenda with the IMF and everything else would be secondary. Although they don’t expect it, for having a counterintuitive thought, Occupiers would love it. It's like Henry Ford and Steve Jobs made thoughtful proposals we were not expecting, but love.

Innovator of cars we love, Ford is quoted as saying that if he had asked people what they wanted, they would have said faster horses. Jobs transformed several industries, with products, services and systems that people did not expect, but love.

Increasingly, electricity grows its share of total energy consumption. For example, road transport is changing from liquid fuels to electricity. But then, Why has electricity not been transform to be loved? Because he who made the law, also made the loophole.

For several decades until 1972, the world depended on cheap oil and was organized around it. Since then, the guarantee of cheap energy is gone, but not the energy sector legislation designed to protect it under that guarantee. Although legislative changes were made in many jurisdictions, the sector continuous protected from startups.

Maintaining this illusion, energy is subsidized, benefiting those on "Wall Street" and hurting Occupiers. With subsidized prices all consumers are encouraged to waste energy, promoting unsustainable consumption that later on taxpayers, mainly Occupiers, will pay dearly for through taxes.

The best example of the damage caused by artificially cheap energy and which tax reform should correct is that of the Dominican Republic. Here we have many Occupiers since long ago and probably will have many more if the highly risky large coal plants (see a 10 minutes’ video) or natural gas of 300 or 600 megawatts government bet goes through.

Dominicans have been suffering a prolonged systemic electricity crisis of major proportions, which encourages unchecked and unbalanced demand, accumulate excessive debt, undermines the national budget and from time to time significantly increases foreign debt. Although less visible, a similar legal situation also occurs in the U.S. and Europe affecting their Occupiers. The opportunities are just as important here as in all these countries.

The guarantee of cheap information, for example, with the legislation based on the value-added electricity architecture framework, will encourage thoughtful proposals that Occupiers will love, for lower taxes and higher job opportunities. Such legislation will curb excessive generation increases with consumption reductions.

Thus, taxed energy: will encourage investment in energy efficiency and energy savings in final consumption, will decrease and decongest land transport, while it will significantly increase virtual communication, for example, at the premises of the productive sectors and households for education and health services.