Greening the Surcharge


Published on Saturday 12 July 2008

by Carmel Cacopardo



The surcharge is back in the news after reaching its highest level yet : 95 per cent. Over the past months two alternatives were proposed, with the government now proposing a third in the form of redesigned tariffs.

The MLP, during the March 2008 electoral campaign, proposed that the surcharge ought to be halved. This meant that all of us would have to foot the bill for everybody’s consumption through increased subsidies. The second proposal was brought forward by AD, the Green party: that surcharge rates should be adjusted to benefit low users at the expense of the high consumers.

The change of MLP leadership brought about a change of views on the subject. New MLP leader Joseph Muscat, in a meeting with an AD delegation led by Arnold Cassola, stated that the AD surcharge proposal was a very reasonable basis for discussion. To his credit, Dr Muscat is inching Labour towards an adoption of AD’s surcharge policy.

The two remaining proposals are complementary. The government’s proposal to redesign tariffs can be integrated with the AD proposal producing a green pricing strategy. The rates to be established next October can be constructed in such a manner as to encourage low consumption and penalise high use of water and energy.

Water consumption can be substantially reduced through encouraging the use of rainwater not just in homes but also in offices and commercial establishments where possible. The provision of a rainwater cistern is a compulsory feature of the Maltese building code. It has in fact been codified since 1880. No building should be without a water cistern of a suitable size to retain rainwater incident on its roof. Yet, when the rainy season commences, flooded streets and overflowing sewers are a familiar sight. This being clear enough proof that, in lieu of collecting rainwater in a water cistern, a number of property owners just pour their rainwater onto the streets or, worse still, channel it directly into the public sewers. This does not only signify the loss of a natural resource but it is also the cause of considerable expense and dangers through the flooding of streets.

An overloaded sewer increases the load on sewage purification plants and, consequently, the energy required to purify the sewage before its intended use.

While emphasising the need for enforcement to ensure that water cisterns of an appropriate size are constructed in new buildings, I believe that the carrot is more effective than the stick.

Encouraging the use of rainwater and reflecting such encouragement in the water pricing policy would signify having low water rates for low consumption. This is already partially existent in the current pricing structure as the first cubic metres of water consumed per person in every household is subsidised. However, when the surcharge was introduced it did not consider this a feature worth emphasising and in fact the surcharge was applied indiscriminately irrespective of consumption.

The expense to the exchequer through applying lower rates for those who shift or have shifted their water consumption from mains water to rainwater will be more than recouped through lower costs in producing water, less waste water to treat at sewage purification plants and less flooding of streets after a heavy rainstorm.

In respect of energy bills, current basic rates differentiate between low and high users, yet the surcharge mechanism ignored this too. Rates charged vary for the first 6,400 units per annum at which point the maximum rate is applied.

In addition, those installing photovoltaic panels receive a financial grant to encourage installation. They are connected to the national grid as a result selling any excess electricity generated. Excess electricity so generated is deducted from electricity bills on the basis of one unit generated compensating for every unit consumed. This is positive although it is still far off from current practice elsewhere. In other countries, notably in Germany, electricity generated through photovoltaic panels or wind turbines is paid for at a much higher rate. This not only encourages the generation of renewable energy but it is also an environmental statement to the effect that the conventional method of generation of electricity has hidden costs which are not yet reflected in the price structure. Part of these hidden costs are medical costs related to respiratory diseases to which power station emissions are a major contributor.

In the alternative set-up of revised tariffs, the pricing structure must support those who strive to minimise their environmental impacts. The new water and electricity pricing policy must not be just another accounting exercise. It must also be a reflection of the government’s environmental policy, one of the instruments through which it can manifest that it is serious when it proclaims to one and all that sustainable development is on the top of its agenda.

Distributing energy saving bulbs, whenever this will happen, is not sufficient.

The author, an architect and civil engineer, is the spokesman on sustainable development and local government of Alternattiva Demokratika – the Green party in Malta.


you may also read through the following posts which deal with the same subject :

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