Should an energy tax be considered as an option in the bid to cut global warming?

First Break intends to continue following the crucial debate on global warming and measures to cut emissions around the world. Rodney Chase, president and deputy chief executive officer, BP Amoco last month spoke to a meeting of the Fabian Society in London about how the British government might address the sensitive issue of energy tax as a way forward. Below we publish extracts from the speech. Any discussion on energy taxes runs the risk of degenerating into a partisan battle of words between those with complete, and those with little, confidence in the ability of taxes to influence consumer behaviour and encourage energy efficiency. True to the stereotype, business is perceived as belonging to one camp and the environmentalist to another. Each questions each otherís motives, and everyone goes away at the end convinced they are unloved and misunderstood. I accept that there is a limit to what firms will do voluntarily to curb their energy emissions, and that tax can undoubtedly be a powerful instrument for changing behaviour, particularly if it is carefully directed and if energy users face genuine alternatives. But I equally believe that, in many instances, there are other economic instruments which offer greater benefits than taxation. I also believe that some taxes do more harm than good, and that 'an energy tax on business' could easily fall into this category if we are not very careful with its design. So, this is not a simple case of being 'pro' or 'anti' energy taxes. There are risks and uncertainties on both sides, and we need to move cautiously.