Page 157 - Ecuador's Banana Sector under Climate Change

chapter 6: climate change policies and their potential impact on ecuador’s banana sector - an economic analysis
Figure 49 Carbon footprint relating to domestic transportation
kgC02eq/t
60 50 40 30 20 10
0
Via depot
Direct to port
Source: Hospido and Roibás, Chapter 4
average carbon content of the fuel and assumptions on the average combustion efficiency. The different grades of gasoline are taxed at approximately 6.7 cents per litre, while diesel is taxed at approximately 7.7 cents per litre. The most recent pump price in Ecuador is 58 cents per liter; thus, a 7-cent per litre tax would have an effective emission tax rate of approximately 12 percent.55 The impact
of such an increase on the cost of fuel - after some short-term adjustments - would contribute to greater efficiencies in the logistics of domestic transportation. As noted earlier in this chapter, fuel prices and road charges would incentivize pooling supply chains to reduce backhaul and would minimize the proportion of loads that are less than full.
Greater GHG emission reductions are likely in the longer term from adjustments to infrastructure. The increased risk of flooding and the likely need to invest in water management systems - discussed in Chapter 2 - could result in some shift in the production of bananas. This may also apply in the case of investing in road systems. With regard to the planning process, the application of a shadow price for fuel, including an emission tax, may generate a proportion of the reduction in GHG emissions that is appropriate, without having to impose a fuel tax.
5. Policies to control on-farm emissions at the national level
A recent LCA of Ecuador’s banana production (see Chapter 4) provides the empirical basis for the discussion of on-farm emissions. Table 53 indicates the
55 Average annual price for 2012 (World Development Indicators series EP.PMP.SGAS.CD). Ecuador’s petrol prices in 2012 were approximately 30 percent below notional world petrol prices, while Mexico’s was USD 0.86/l. It is, therefore, difficult to calculate an effective emission tax rate with the subsidy.
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