Sri Lanka Environment Levy Bill: Politics of Adaptation Fund

Global climate politics is finally at home. Much controversial Environmental Conservation levy bill passed without a debate in Sri Lanka Parliament on April 9, 2008. According to Environment Minister Champika Ranawaka the Bill is based on the ‘polluter pays principle’. While the tax itself not justified in the Bill, the question remain why the levy charged for electronic items, phone bills and electricity bills for the climate adaptation Fund.

The polluter pays principle is the principle according to which the polluter should bear the cost of measures to reduce pollution according to the extent of either the damage done to society or the exceeding of an acceptable level (standard) of pollution. The energy guzzling industries that emits large amount of green house gases (GHG) are the sole responsible for the climate change. As the impacts of climate change are trans-boundary, these industries must put to under review. Thus, at the local level big industries must pay a tax to cover the adaptation for climate change.

At the international level Sri Lanka's current emission level which is around 600 kilograms is low compared to the global per capita carbon threshold of 2,200 kg. This means Sri Lanka can still increase the per capita emissions. Carbon footprint in the US, Australia, Canada even neighboring India and China are very high. These countries must pay the adaptation bill for damaging the poor countries by emitting large amount of GHG. It’s unlikely and unaccepted to impose tax on the poor in low carbon economy for using phone and electricity. If the local people to pay the adaptation bill are we going to tax those people use the firewood cooking, brick kilns, farmers who release methane or the local authorities who let garbage dumps keep unmanaged. Are we going to distinguish between luxury emissions and the survival emission?

It is a well accepted fact that all electronic devises such as computer, mobile phones to name a few items produce a lot of pollution. To deal with such electronic waste (e-waste) certain countries have adopted Extended Producer Responsibility (EPR) which charge a little percentage of fee from the user and higher percentage from the producer or the agent. At the same time they have established a system of collecting, sorting and recycling mechanisms to ensure the proper use of the funds generate from the EPR tax. The South Korea is one good example in the Asia-Pacific.

However, the Sri Lanka government’s controversial bill does not provide such mechanism. We have been communicating with the Central Environmental Authority (CEA) since 2004 to bring such legislations under the National Environmental Act 1980. Since three Chairman’s and two ministers have been in helm of affairs but not legislation

The larger question is what will be the social cost of this Bill. Despite electronic devices are environmentally not benign, it reduces traveling time and space and improves information communication. Modern technology has literally reduced the inaccessibility to far away villages which was a dream a decade ago. The proposed tax for mobile phones, television in the Bill has a huge potential to create adverse impacts to the communication including access to information which is a constitutional right.

Polluter pays principle is not to stop the pollution. It distributes the external cost of pollution among the society through the market principle. The poor who are marginalized and excluded from the development suffer more due to this business friendly principle.

However, even if the Ministry respect to the Polluter Pays principle how come the industries polluting large quantities of water or air are not being taxed properly. The principle should start from the big polluters and not by the end users.

The concern remains on the process of how this will be imposed on the society. To common knowledge there was no public consultation on the feasibility and the approach of this Bill. As we learned there was no debate in the parliament too.

Today, environmental politics has become the biggest threat to the environment as well as the social safeguard of the people. Instead of consulting with environmental experts, the government looks to poorly equipped economist which makes the social and environmental decisions. Minister Ranawaka is not new to environmental issues. However, the levy seems to be based on flawed principles and muddling with financing projects of some authorities in the government. The Rs. 1,000 million target in the bill is the pointer to a new environment business in the small Island country.