OPEC chief urges change in energy tax philosophy

By the OGJ Online Staff

HOUSTON, Nov. 9 -- It's time for energy-consuming countries to reconsider their entire philosophy of energy taxation to ensure consistency in international trade, said the head of the Organization of Petroleum Exporting Countries at the Global Climate Change conference in Marrakesh.

Increased taxes on energy too often are the key tool for obtaining environmental objective, said OPEC Sec. Gen. Al�odr�ez Araque.

"The track record in many consuming countries is so far poor, with oil products often taxed at levels that have probably already reached a pain threshold," he said. "While oil is taxed so heavily, other fuels are taxed at far lower levels and are sometimes even subsidized."

At a summit meeting last year in Caracas, OPEC heads of state said they were ready to participate in climate change negotiations to ensure "a balanced and comprehensive" outcome.

At that time, said Rodr�ez, "We specifically urged Annex I countries to minimize the adverse social and economic impacts of their response measures on nations whose economies are highly dependent on the production and export of fossil fuels."

He said, "This is a serious and genuine concern for oil-producing developing countries, which needs to be addressed clearly as this conference reaches its conclusion."

Implementation of the Kyoto Protocol would have an enormous impact on oil-producing developing countries, Rodr�ez said.

"Not only could this have serious and unjust economic, social, and political repercussions for some of these countries," he said, "but it would also go against the spirit of the framework convention."

Rodr�ez told the group, "We should not forget that the biggest environmental tragedy confronting us is poverty."