Energy Policy in Spain: news items

3 Apr

In the last month, several newspapers have reported some very interesting changes in Spain´s energy policy that require further comment and analysis

1. Carbon tax? Now?

A couple of days ago, El Pais published an article on the possibility of creating a carbon tax aimed to finance the extra cost of renewables. This new tax would apply only to household heating and transportation, since big carbon producers are already paying for their emissions through the ETS (Emission Trading System). El País also states that the purpose of this new tax would be to include these two sectors (heating and transportation) in the Government´s efforts to reduce carbon emissions, in compliance to the EU´s binding emission goals.

Let´s explore this for a moment and clarify the concept of carbon tax. A carbon tax has been considered the alternative to a cap and trade system in European Energy Policy in the last decade. However, several EU countries and utilities have strongly advocated against it. However, countries like Finland, Sweden or the UK have succesfully implemented different kinds of carbon taxes (See, for example, the UK´s Climate Change Levy). The main purpose of these taxes has been to show the real price of fossil fuels by adding to their price what has been called the social cost of carbon, which is the estimate value of the environmental externalities caused by burning fossil fuel and thus emitting carbon. Because of this, implementing a carbon tax has been considered an efficient way of discouraging energy consumption and fossil fuel burning.

Should a carbon tax be implemented in Spain? We will address this in our next post.

2. Wind Energy in Spain

The second news item I´d like to talk about is how a renewable energy source is becoming increasingly important in the last few years in Spain: wind energy. Electricity generated from wind turbines was the main energy source in Spain in March, El Pais reported. Wind energy covered 21% of Spain´s energy demand, generating 4.738 gigawatts per hour. This is a very encouraging data that shows how Spain´s investment on renewables is worth. We will develop further this issue in forthcoming posts.


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