Japan has just announced that it will gradually introduce a new tax on carbon emissions for oil, natural gas, and coal, over the next five years. Energy costs are already very high since the closing down of all the countries nuclear power plants, and these new taxes will only see those costs increase.
The tax will be introduced in three phases, with the first phase increasing existing levies by 12-31 percent, costing utilities an estimated $1.02 billion each year from 2016.
So far, in order to try and protect the public from high energy prices the utilities have been funding the high cost energy purchases by building up debt. The new carbon taxes could force the utilities to start passing on the increased cost to their customers.
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Yu Nagatomi, a researcher at the Institute of Energy Economics of Japan, said that now is the “time for an open and honest discussion of who is going to pay for the increased fuel bills.”
Nippon Keidanren, Japan’s largest business lobby has pleaded with the government to rethink the new tax, fearing that it could raise energy costs for businesses even further and force some companies to move abroad.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com