Latest news with #EuropeanClimateFoundation
Mint
25-07-2025
- Business
- Mint
Here's a case for why AI should pay for the environmental damage it causes
Humanity has collectively decided to keep pampering the fossil-fuel industry despite knowing for decades that its products are not only harmful to long-term well-being but also imminently replaceable. It shouldn't make the same expensive mistake with artificial intelligence. Last week, Laurence Tubiana, chief executive officer of the European Climate Foundation, a non-profit research and advocacy group, suggested taxing AI to raise money for climate adaptation. Tubiana helped craft the Paris climate accord and is part of the Global Solidarity Levies Task Force, a group rummaging through the world's couch cushions for spare change to help it adjust to an environment growing more chaotic and destructive as the planet gets hotter. The group has identified some obvious targets, such as taxing 'premium flyers," cryptocurrencies, fossil-fuel profits and shipping emissions. Also Read: Outrage over AI is pointless if we're clueless about AI models Until Tubiana's comments, the group hasn't said much about AI. Sutton's Law—based on the apocryphal claim by Willie Sutton that he robbed banks because that's where the money was—suggests it might want to give AI a look. The United Nations Trade and Development Agency has estimated the value of this market will explode from $189 billion to $4.8 trillion by 2033, starting to threaten the size of the fossil-fuel market. All that growth will require dizzying amounts of energy to run data centers around the clock and a lot of water to cool acres of servers. These power-hungry facilities, which are popping up around the world like acne on a teenager, could consume as much as 12% of total US electricity by 2028, according to a report last year by the Lawrence Berkeley National Laboratory, up from 4.4% in 2023. By 2050, data centers could use as much as 8.7% of the entire world's energy, BloombergNEF estimates. Also Read: Climate progress: India's transition path to clean energy is about get steeper Much of that power will be generated by fossil fuels, the primary source of the greenhouse gases cooking the atmosphere. Data-center operations could increase global emissions of these gases by 3.5 billion tonnes in the next decade, BNEF reckons, which is about 10% of total global emissions today. The microchips, steel and cement used to build data centers carry their own heavy climate cost. Meanwhile, US data centers could guzzle 74 billion gallons of water a year by 2028, up from less than 6 billion in 2014, according to Lawrence Berkeley. In light of all this, taxing AI to defray its harm to the climate sounds like a great idea. We've already got the perfect example of what happens when you fail to hold an industry accountable for its externalities: fossil fuels. By one estimate, we give oil, gas and coal producers about $6 trillion every year in implied subsidies by failing to price their products high enough to account for their environmental damage. That's a lot of money that could go toward steeling ourselves against rising seas and weather disasters. Also Read: Rely on modern geothermal energy to power our AI ambitions The rationale of these subsidies is that the societal benefits of fossil fuels—namely, abundant energy to fuel economic growth—outweigh the costs. But this gets more untrue every year as an increasingly chaotic climate wreaks more havoc. Each degree Celsius the planet warms over pre-industrial averages cuts global economic growth by 12%, according to a National Bureau of Economic Research study last year. Of course, this wasn't so apparent in the 19th century, when today's fossil fuel industry was just a gleam in John D. Rockefeller's eye. Magical stuff came out of the ground that kept the lights on, and it took us a little while to see the downside. In contrast, the societal benefits of AI are fuzzy at best while the many downsides are already plain. It makes no sense to give this industry its own free pass on environmental destruction. In theory, a tax on AI, or at least its carbon emissions, would push tech companies to seek efficiency and cleaner energy sources. In practice, making such a tax work would be challenging, Robert Bikel, director of the Socially‚ Environmentally‚ and Ethically Responsible Programme at the Pepperdine Graziadio Business School, told me. If you make the tax too low, then it becomes just another cost of business and loses effectiveness. If you make it too high, then tech companies will just build their data centers in a jurisdiction that's not so picky about the environment. The net result might be more emissions than without the tax. Making such a levy universal would help solve that problem. But good luck getting two of the world's biggest AI enthusiasts—US President Donald Trump's US and China—to play along. For that matter, a global tax on carbon would be the most efficient device of all, taking care of those fossil-fuel subsidies and keeping the AI industry in line in one fell swoop. But that's even deeper in political fantasyland. Also Read: Going nuclear will be the only way to keep the lights on as AI guzzles ever more electricity Still, there are other tools. NIMBYism is unhelpful in many ways, but it has put some brakes on runaway data-center growth. In the past two years, projects worth $64 billion have been canceled or delayed by public opposition, according to the research group Data Center Watch. The blowback is bipartisan; 55% of the public officials opposing new data centers were Republicans. Pressure from locals and investors could be enough to make AI purveyors embrace tech that uses less energy and water. They could use their excess heat to keep local homes warm, cutting energy bills and fossil fuel demand. They could invest in renewables, grid upgrades and carbon removal and capture. Most importantly, though, they need to stop and think about exactly how much of this rush to make AI as big and resource-consuming as physically possible is truly necessary. 'There's a lot of techno-optimism that more tech and more growth is inherently good," Bikel said. 'I like to flip that around and say what is the economy serving? What's AI serving? How is it contributing to human flourishing or even just existential stability?" Answering those questions would go a long way to making AI's growth more sustainable and avoiding many more expensive mistakes. ©Bloomberg The author is a Bloomberg Opinion editor and columnist covering climate change.
Irish Independent
24-07-2025
- Business
- Irish Independent
Tax group points out inconsistency in greenhouse gas taxes as farms escape cost
The group defends the carbon tax, which will rise again in the autumn budget, noting that revenues from it have been used to boost welfare payments and provide energy-efficiency supports for low-income households. It also notes that the tax – intended to discourage use of fossil fuels as the primary sources of greenhouse gas emissions – is not applied to the other primary source, methane. 'It should be noted that the vast majority of greenhouse gas emissions from agriculture (ie methane) are not subject to any environmental tax,' the group says in analysis presented to ministers. Farmers did have to pay carbon tax on fuel for agricultural vehicles but it was at a reduced rate, it said. 'Marked gas oil' - as agricultural diesel is categorised – currently costs 48 cents less per litre than regular diesel, it said. 'Farmers continue to be eligible for a double income tax relief,' the group said. 'A farmer may take an income tax or corporation tax deduction for farm diesel and then a further deduction for farm diesel which is equal to the difference between the carbon tax charged and the carbon tax that would have been charged had it been calculated at 2012 levels.' The tax paper also highlights different environmental taxes in other EU countries, including a new tax on livestock emissions announced in Denmark. Danish farmers will pay a tax of €40 per tonne of livestock methane emissions from 2030 which will increase to €100 by 2035. Revenues will help finance what the Danish parliament has described as the 'reorganisation' of the landscape with more focus on forestry and natural spaces. The Tax Strategy Group make no recommendations based on the proposal but flag research recently undertaken in Ireland around similar ideas. 'The Pathways project, funded by the European Climate Foundation, in partnership with the Institute of International & European Affairs, has published a series of papers on the future of the Irish Agri-food sector,' it says. 'Their paper on 'Agricultural Climate Policy in Ireland from 2030 to Net Zero' recommends Ireland establish an independent Emissions Pricing Design Commission, modelled on Denmark's expert group, to assess the feasibility and design of emissions pricing in Ireland's agricultural sector.'
Bloomberg
24-07-2025
- Business
- Bloomberg
AI Should Pay a Price for Its Environmental Damage
Humanity has collectively decided to keep pampering the fossil-fuel industry despite knowing for decades that its products are not only harmful to long-term well-being but also imminently replaceable. It shouldn't make the same expensive mistake with artificial intelligence. Last week, Laurence Tubiana, chief executive officer of the European Climate Foundation, a nonprofit research and advocacy group, suggested taxing AI to raise money for climate adaptation. Tubiana helped craft the Paris climate accord and is part of the Global Solidarity Levies Task Force, a group rummaging through the world's couch cushions for spare change to help it adjust to an environment growing more chaotic and destructive as the planet gets hotter. The group has identified some obvious targets, such as taxing ' premium flyers,' cryptocurrencies, fossil-fuel profits and shipping emissions.
The Guardian
17-07-2025
- Business
- The Guardian
Tax on AI and crypto could fund climate action, says former Paris accords envoy
Governments should consider taxing artificial intelligence and cryptocurrencies to generate funds to deal with the climate crisis, one of the architects of the Paris agreement has said. Laurence Tubiana, the chief executive of the European Climate Foundation and a former French diplomat, is co-lead of the Global Solidarity Levies Task Force, an international initiative to find new sources of funds for climate action by taxing highly polluting activities including aviation and fossil fuel extraction. She said cryptocurrency should certainly be taxed, and levies on AI should be considered. 'That could be a first step – again, it's the same rationale [for AI as taxing cryptocurrency], because they use a lot of energy,' she said. 'Crypto seems to be something which is not regulated at all, and of course it's a concern, from the financial stability element.' The equivalent of Poland's annual energy consumption is expended each year just on generating bitcoin, one of the leading cryptocurrencies. AI also consumes vast resources, resulting in IT companies scrabbling to secure electricity supplies in locations around the world. Taxing AI could prove tricky, Tubiana conceded, as companies might try to shift the location of their datacentres. Although there was likely to be 'pushback' against taxing cryptocurrencies, particularly from the US, where Donald Trump is an enthusiastic supporter of the technology, she said central bankers had expressed an interest. 'Because we need to regulate it – it's organised crime sometimes, so you should look at where the money's coming from, and who is the user,' Tubiana said. The taskforce has assigned a group of experts to examine how this could be achieved. The taskforce has scored an early success in the form of an agreement among some countries to put new charges on business-class and first-class airline tickets, and private jets. France, Spain, Kenya, Barbados, Somalia, Benin, Sierra Leone, and Antigua and Barbuda were the first countries to sign up to the accord announced at the end of June. The French president, Emmanuel Macron, said: 'We have to mobilise more and more countries in order for these critical sectors which are benefiting from globalisation to contribute to the financing of this common effort [to combat the climate crisis]. I want to urge all possible countries to join this international framework because it's absolutely key, and it's part of our agenda.' Such taxes could raise €147bn (£127bn) a year, if the big economies joined in. The use of private jets increased by almost 50% between 2019 and 2023, and first- and business-class flying recovered more speedily than economy class after the Covid lockdowns. Polls suggest that charging premier-class passengers more would be a popular move. Tubiana said: 'When you have your car, you pay tax, and when you fly you don't pay tax, so there is an element of justice there that resonates.' Countries could impose such taxes without a global agreement, she added. 'The aviation tax is not that complicated, because it's really a sovereign decision.' A potential carbon tax on shipping is also still under discussion, after the International Maritime Organization agreed steps towards such a deal in April. A further meeting will take place in October, and Tubiana said she was 'reasonably optimistic' a new levy would be decided. The taskforce is also examining options such as a tax on buying shares in the stock market, which could raise as much as €105bn a year without distorting the market, according to research. Sign up to Down to Earth The planet's most important stories. Get all the week's environment news - the good, the bad and the essential after newsletter promotion Rebecca Newsom, the global political lead of Greenpeace International's Stop Drilling Start Paying campaign, urged the taskforce to go further and push for taxes on fossil fuel production. 'The obvious next step is to hold oil and gas corporations to account,' she said. 'As fossil fuel barons rake in obscene profits, and people are battered with increasingly violent floods, storms and wildfires, it's no surprise that eight out of 10 people support making them pay. Members of the Global Solidarity Levies Task Force and rich countries around the world should act upon this enormous public mandate.' Tubiana, who guided the Cop21 conference in 2015 at which the Paris agreement was signed, also expressed concern about the direction France was taking in international climate negotiations. Macron has mooted a delay to the European Commission's proposal of a 90% cut to greenhouse gas emissions by 2040, a target that is supposed to be confirmed by the EU parliament and member states in September before the Cop30 climate summit in Brazil in November. Tubiana said Macron's new-found hesitation over climate policy was 'a very sad story'. She warned that it would backfire and would reduce the chances of a strong outcome for Cop30, at which countries must set new emissions goals under the Paris agreement. 'How can we ask anybody to do something if we're not doing it, if we're not proving that we believe we can decarbonise the economy?' she said. 'I hope they will wake up to the bad signals they are giving. It's really not reasonable to think that delaying action will benefit the economy of France. We need innovation, we don't need to delay.'
The Guardian
17-07-2025
- Business
- The Guardian
Tax on AI and crypto could fund climate action, says former Paris accords envoy
Governments should consider taxing artificial intelligence and cryptocurrencies to generate funds to deal with the climate crisis, one of the architects of the Paris agreement has said. Laurence Tubiana, the chief executive of the European Climate Foundation and a former French diplomat, is co-lead of the Global Solidarity Levies Task Force, an international initiative to find new sources of funds for climate action by taxing highly polluting activities including aviation and fossil fuel extraction. She said cryptocurrency should certainly be taxed, and levies on AI should be considered. 'That could be a first step – again, it's the same rationale [for AI as taxing cryptocurrency], because they use a lot of energy,' she said. 'Crypto seems to be something which is not regulated at all, and of course it's a concern, from the financial stability element.' The equivalent of Poland's annual energy consumption is expended each year just on generating bitcoin, one of the leading cryptocurrencies. AI also consumes vast resources, resulting in IT companies scrabbling to secure electricity supplies in locations around the world. Taxing AI could prove tricky, Tubiana conceded, as companies might try to shift the location of their datacentres. Although there was likely to be 'pushback' against taxing cryptocurrencies, particularly from the US, where Donald Trump is an enthusiastic supporter of the technology, she said central bankers had expressed an interest. 'Because we need to regulate it – it's organised crime sometimes, so you should look at where the money's coming from, and who is the user,' Tubiana said. The taskforce has assigned a group of experts to examine how this could be achieved. The taskforce has scored an early success in the form of an agreement among some countries to put new charges on business-class and first-class airline tickets, and private jets. France, Spain, Kenya, Barbados, Somalia, Benin, Sierra Leone, and Antigua and Barbuda were the first countries to sign up to the accord announced at the end of June. The French president, Emmanuel Macron, said: 'We have to mobilise more and more countries in order for these critical sectors which are benefiting from globalisation to contribute to the financing of this common effort [to combat the climate crisis]. I want to urge all possible countries to join this international framework because it's absolutely key, and it's part of our agenda.' Such taxes could raise €147bn (£127bn) a year, if the big economies joined in. The use of private jets increased by almost 50% between 2019 and 2023, and first- and business-class flying recovered more speedily than economy class after the Covid lockdowns. Polls suggest that charging premier-class passengers more would be a popular move. Tubiana said: 'When you have your car, you pay tax, and when you fly you don't pay tax, so there is an element of justice there that resonates.' Countries could impose such taxes without a global agreement, she added. 'The aviation tax is not that complicated, because it's really a sovereign decision.' A potential carbon tax on shipping is also still under discussion, after the International Maritime Organization agreed steps towards such a deal in April. A further meeting will take place in October, and Tubiana said she was 'reasonably optimistic' a new levy would be decided. The taskforce is also examining options such as a tax on buying shares in the stock market, which could raise as much as €105bn a year without distorting the market, according to research. Sign up to Down to Earth The planet's most important stories. Get all the week's environment news - the good, the bad and the essential after newsletter promotion Rebecca Newsom, the global political lead of Greenpeace International's Stop Drilling Start Paying campaign, urged the taskforce to go further and push for taxes on fossil fuel production. 'The obvious next step is to hold oil and gas corporations to account,' she said. 'As fossil fuel barons rake in obscene profits, and people are battered with increasingly violent floods, storms and wildfires, it's no surprise that eight out of 10 people support making them pay. Members of the Global Solidarity Levies Task Force and rich countries around the world should act upon this enormous public mandate.' Tubiana, who guided the Cop21 conference in 2015 at which the Paris agreement was signed, also expressed concern about the direction France was taking in international climate negotiations. Macron has mooted a delay to the European Commission's proposal of a 90% cut to greenhouse gas emissions by 2040, a target that is supposed to be confirmed by the EU parliament and member states in September before the Cop30 climate summit in Brazil in November. Tubiana said Macron's new-found hesitation over climate policy was 'a very sad story'. She warned that it would backfire and would reduce the chances of a strong outcome for Cop30, at which countries must set new emissions goals under the Paris agreement. 'How can we ask anybody to do something if we're not doing it, if we're not proving that we believe we can decarbonise the economy?' she said. 'I hope they will wake up to the bad signals they are giving. It's really not reasonable to think that delaying action will benefit the economy of France. We need innovation, we don't need to delay.'
