Economists at the Bank of Israel have reached the conclusion that carbon taxation is the most effective policy for reducing greenhouse gas emissions. The central is bank is due shortly to publish its recommendation for the rate of a future tax. In the background is the fear that the European Union will shortly impose duties on imports from countries that have not introduced "carbon pricing" policies, a measure that is liable to harm Israeli exports to Europe, which is still Israel's main export market.
Last week, Prime Minister Benjamin Netanyahu declared that Israel "is committed to switching from fossil fuels to renewable energy by 2050." Unlike Netanyahu's non-binding declaration, in the EU reaching zero emissions by 2050 is already a binding target. The international effort to reduce greenhouse gas emissions will be renewed with extra zeal once the world stops having to deal with the Covid-19 pandemic, and after a new president takes up his post in the US. President-elect Joe Biden has already appointed former secretary of state John Kerry to lead the effort to halt global warming. With this effort underway, politicians in Israel will find it hard to continue ignoring the sensitive issue of imposing taxation on carbon emissions.
Minister of Environmental Protection Gila Gamliel supports the introduction of a carbon pricing policy, as long as it does not cause harm to economically weak sections of the population or to the competitiveness of Israeli industry. "In order to deal with the climate crisis and to switch to a low-carbon economy, we must examine, together with the leading countries in this area, effective policy tools such as carbon pricing mechanisms that will encourage a reduction in greenhouse gas emissions," Gamliel told "Globes", adding "We shall continue to carry out research and to cooperate with all players in the economy in order to reach the best possible solution for society, the economy, and the environment."
Published by Globes, Israel business news - en.globes.co.il - on December 14, 2020
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