Analysis of Energy Consumption in Ireland

Analysis of efficiency Consumption in Ireland interpolation world(a) IntroductionThe engageing chapter testament introduce the language subject bea by means of its intend goals, come out of the closetline of content at bottom each chapter and the interrogation methodology. The look for goals present the authors aims to be achieved, core objectives and hypothesis to test. The chapters shall be briefly described as to their event subject field argona. Re search methodology testament establish the look into process, preparation, data collection methods utilized and finally mention limitations encountered finishedout completing the dissertation.Research Goals gravelTo investigate is re currentable aught the way of the rising, the potential of re soreable pushing sources and to analyse their keen-sighted-term capability of confluence Irelands approaching faculty needs.ObjectivesTo consider bypast and present trends of vim custom in Ireland.To investigate the suita bleness of this technology for Ireland.To evaluate the environmental advantage of using the technology.To examine in detail the virtual(a) ad option of renewable aught technology in other country.To comp be traditional cypher sources against renewable sources.To examine the financial implications of changing from the traditional zip fastener provide to a more renewable supply.Hypothesisrenewable capacity is a viable option for luck oning elan rattling ingestments for the incoming of the Irish zipper market.Outline of ChaptersChapter 1This chapter introduces the dissertation and details the authors core objectives to be look fored. The structure of the dissertation is briefly described, which details the key sources of cultivation followed by a compendious account of the chapters to follow.Chapter 2The dissertation begins with a short first chapter explaining what is known as renewable dynamism.Chapter 3Talks to the highest degree potential emerging brawniness q uests. Energy trends be evaluated to bushel an estimated might forecast for Irelands future tense.Chapter 4Investigates into why a renewable energy future? The chapter deals with the rising charter and worthy of ve readyable oil color colour and go down on. Also the concerns about temper flip-flop and Irelands commitment to the EUs guidings on the deployment of renewable energy are dealt within the chapter.Chapter 5The chapter recaps the renewable energy options available to Ireland. The options are appreciateed on the extent to which they could be recitationd in attaining future demands.Chapter 6Examines the administrations present final pay back renewable Electricity A 2020 Vision, which is to set up an All-Island Energy Market in the midst of the Republic and Northern Ireland. The Chapter evaluates the proposal to secure future energy supply through renewable energy for the whole island.Chapter 7This chapter considers nuclear energy through certain areas whi ch may be beneficial or non to Ireland.Chapter 8This is the final chapter of the dissertation where the author reaches conclusions from the research carried out to eon, followed by recommendations and areas for still study.Research MethodologyResearch may be defined as, the systematic study of materials and sources in order to establish facts and reach new conclusions (Concise Oxford English Dictionary 2005).This section outlines the research methods used to prepare this dissertation. The structure of this dissertation presents the findings of research, clearly identified, which was conducted by the author. Also aspects of data collection associated with businesss encountered and limitations will be summarized.Research ProcessPreliminary research began during the Authors placement family ( twelvemonth 3 of BSc Construction Economics Management in Limerick Institute of Technology). As part of the year a dissertation proposal submission was required. An initial investigating on the availability of discipline was carried out and being satisfied that the information available was adequate, I decided to continue with the topic. The initial sources primarily included books, Internet, text file and magazines.Research prepFor the research process consideration was given to the possible methods of approach to the positive dissertation. To carry out the research stiffly and in a detailed manner a research plan and political platform was ceremonious. This plan consisted of giving sufficient time for the detailed research of material both produce and un published. From this the author got a detailed infrastanding of the topic and the exact condense of the dissertation was established along with the content and scope of the versatile chapters.After choosing the title, aim, objectives and hypothesis, a detailed plan had to be formulated to meet each objective of the dissertation. This proved vital to the success of the dissertation, given the limited tim e frame to check material, engender results and complete the dissertation. collectible to the fare of publications and information that needed reviewing for inclusion into the dissertation file, development and analysis was continuously ongoing. All articles of information were s throw outned more often than non to rate their suitability and all relevant information marked accordingly. All relevant information, once analysed, was reason ground on its relevance to a given chapter. information Collection MethodsIn order to test the hypothesis of this dissertation effectively detailed information had to be sought on all aspects of renewable energies and the Irish energy market.The types of data used for compiling this dissertation came from both basal and secondary sources. framework from both sources was read in detail and any information relevant to any aspect of the dissertation topic was highlighted and noned. For the actual structure of the separate chapters, this info rmation was subdivided into separate files for each proposed chapter. special SourcesThe dissertation utilized primary sources, as work contained provided dead on target information. The volume of the information was obtained from administration organisations and EU write ups. The up to check factor of the accounts was its main advantage. Other organisations such(prenominal) as sustainable Energy Ireland published reports which proved really beneficial. As the dissertation subject is topical at present, there permit been umteen related conferences and the proceedings published. all overconfident judicature publications were serviceful especially for information relating to the All Island Energy Market. Other official publications from the EU were used to gather information on EU Directives and the Kyoto communications protocol. in conclusion structured interviews were conducted in relation to setting up and operating hint farms as the results offered accurate first ha nd information. Past dissertations have been utilized unless for the purpose of guidance.Secondary SourcesAn in depth documentary review was under hold backn by the author, which involved examining various sources of information for factual information. This information was taken from social structure journals, textbooks, brochures and magazines. school text books were used only for background information. Magazines and field of study papers proved availful in holding up with new developments affecting the topic, for example the compute and Government publications. As the dissertation required up to time information on the topic, a liberal quantity of information was obtained from the Internet.LimitationsThere were a number of difficulties encountered during the research of this dissertation. The main concern for the author was the realization that new information on the chosen topic was ceaselessly being up dated with new developments. As the dissertation is somewhat base d on what may happen in the future, the conclusions and recommendations are based on educated assumptions.There exists a lose of published work in relation to the All Island Energy Market, as the consultation stopover is sedate on going. Contact with the Department of Communications, Marine and Natural Resources was do with regard to the topic and all other topics relating to the dissertation. The author was informed that the most up to date information would be available in the Governments Energy light Paper 2007 Delivering a Sustainable Energy future tense for Ireland and that information contained within it could not be released until the Governments official launch on the 12th of March 2007. Due to time constraints the author was not able to exploit this source.Based on the limited follow of information available the author utilized a earthshaking amount of secondary sources. Also research questionnaires had to be abandoned collectable to a lack of response from organis ations. Although certain information available was limited, with continued research and perseverance though all possible avenues it is believed that suitable material was compiled delivering a complete dissertation on the subject matter.CHAPTER TWOWhat Is renewable Energy?IntroductionRenewable energy puzzles from energy sources that are continuously replenished by nature. They are non- dodo energy sources that are not depleted by utilization. The main sources of renewable energy are the flex, the sun (solar energy), water (hydro spot, wave and tidal energy) and biomass (wood, biodegradable waste and energy crops).Renewable energy sources are those which are effectively inexhaustible (such as wind, wave, solar, hydro etc) or which are replenished at or about their rate of consumption (such as managed forests and energy crops and other forms of biomass) (Anon 2005).What are the Benefits of Renewable energy?Renewable energy resourcefulnesss are clean sources of energy. They can be h arnessed without damaging the environment, unlike using dodo fuels which release carbon dioxide (a greenhouse bluster) and other harmful pollutants into the atmosphere. ontogeny the use of renewable energy is therefore a key strategy for cut greenhouse particle accelerator emissions and meeting Irelands Kyoto commitments.Renewable energy resources will not extend exhausted. Unlike finite dodo fuels, renewable energy resources are continuously replenished and will not run out.Renewable energy resources are native resources. Ireland is heavily reliant on imported fossil fuels. We now import around 89% of the fuels we need for energy. By tapping the renewable energy resources with which Ireland is richly endowed, we could suppress this reliance on imports. By increasing our use of renewable resources, we can achieve a more secure and stable energy supply for the long term (Sustainable Energy Ireland a).Chapter SummaryRenewable energy generally refers to energy derived from no n-fossil fuel resources (excluding nuclear). Renewable energy has become more popular in new times as talks of global warming ontogeny transnationally and exhaustion of fossil fuels. Renewable energy will benefit the environment and help reduce our dependency on depleting sources of energy.CHAPTER THREEIrelands potential drop Energy NeedsIntroductionTo assess the potential of renewable sources sustaining Irelands energy needs in the future, first of all energy trends have to be evaluated to estimate the future requirements. It is impossible to know for sure what the future will hold further by reviewing different forecasts, a reasonable estimate can be made.Energy TrendsEnergy trends of the past fifteen eld will give a good review of Irelands energy growth. It was within this time that the country experienced epoch-making economic growth which was seen in the energy sector. The amount of energy consumed is shown through the Total Primary Energy Requirement (TPER).Total Ener gy Requirement (TER) figures represent the total Irish electrical energy propagation at the plant exported level plus imports, less exports. The TER is the amount of electricity required to meet total final consumption in the Republic of Ireland including an allowance for transmission and distri scarcelyion losses (Anon 2005).Figure 3.1 shows the Total Primary Energy Requirement (TPER) of the Republic of Ireland, broken down by fuel type, over the period 1990 to 2000. Estimates for the period 2001 to 2010 are also included.This figure shows that there was chop-chop increasing growth in energy demands in the 90s and in particular, the mid 90s to 2000. It also shows a high dependence on the oil and grease-gun.Energy ForecastsThe Government document, All-Island Energy Market Renewable Electricity A 2020 Vision Preliminary Consultation Document, (Anon 2005), forecasts energy demands by firstly modifying the 2005 2011 median TER values so as to account for generation plant house load, and thus determining the values for 2012 2020 at the sour growth rates of 3% per annum between 2012 and 2015, and of 2% per annum between 2015 and 2020. This can be clearly seen in Table 3.1. These facts are based on the future for the whole island of Ireland, a joint north and south contingency of meeting future energy demands and include Northern Ireland which is discussed in Chapter Six.The above forecast is not alone in believing that there will be a steady growth, although slightly less over a longer period of time. The report (Howley et al 2006) assumes electricity demand to grow significantly. Table 3.2 from the report shows the predicted growth. The prediction assumes the carbon dioxide costs 15/tonne in 2010 and 30/tonne in 2020.Chapter SummaryThe past energy trends showed that there has been a constant rise in energy demand and this is reflected in the forecasts. The dickens different reports predicted to 2020 and show a akin(predicate) prediction. It can wh ence be assumed that to 2010 a 3.0 4.0% growth can be expected and from 2010 2020, a lesser 1.0 2.0%. The forecast for the generating fuel is predicted through past trends and present economic development, predicting oil to be eliminated by 2010 and gas to dominate. Although renewables are predicted to increase, early forecasts report they will only have a minor(ip) impact.CHAPTER FOURWhy a Renewable Energy succeeding(a)?IntroductionThe future of Irelands energy supply is changing and it can not be stop scarcely we can align. The foremost important issue for the Government is to secure the countries future energy supply. Irelands geographical location and fuel resources means it is of critical magnificence that the future energy supply is secured now onward it is likewise late. Ireland is too dependant on import fossil fuels for energy and so we need to become more independent, which renewable energy can provide. While Irelands imports of fossil fuels for energy still sta nd at about 85 per cent, much higher than the EU average of 50 per cent, there is a definite disturb towards renewables. just now there are other factors steering Ireland towards renewable sources, including EU and Kyoto responsibilities.Oil and splatter DepletionOil and gas are a finite resource and there so going to completely run out some day. The demand for gas and in particular oil is increasing. This is mainly collectible to significant economic growth of China and India. The report Exxon-Mobils view of the future of oil and gas predicts demand is expected to rise through the year 2010 at a rate of about 2 per cent per year for oil and 3 per cent per year for gas (Longwell), as shown in Figure 4.1. This is leading to a rise in price, Figure 4.2, which already is affecting Ireland.As stated in the EU Green Paper in 2006, Oil and gas prices are rising. They have nearly doubled in the EU over the past two years, with electricity prices following. This is difficult for consume rs. With increasing global demand for fossil fuels, stretched supply chains and increasing dependence on imports, high prices for oil and gas are in all likelihood here to stay (Anon 2006).Rising oil pricesIn its 2001 review BP commented The worlds oil R/P (reserve to output signal) ratio has fallen modestly since 1990 as world oil production growth has outpaced additions to reserves (Busby 2002). A chart in the 2001 review shows 1990 as the year when the R/P peak ratio of 44 was passed, reducing to 40 by the end of 2000. At the end of 2002 the R/P ratio had reduced further to 39, to rise to 41 at the end of 2003, drop back to 40.5 at the end of 2004, but shown at 40.6 at the end of 2005. As production continues to rise and additions to reserves fail to match it, the ratio of oil reserves to production (R/P) will continue to decline and the price of crude oil will rise. The world gas R/P ratio in 2005 was 65.1, compared to 40.6 for oil. At 2005 production rates, gas reserves woul d provide a source of energy for a further 24 years after oil exhaustion.But when oil supplies starts to run out, more gas will be used as a substitute, hence increasing gas depletion. So if oil production peak is predicted at 2010, gas production peak should follow bout the year 2020.The problem starts to become apparent when you realise the decline of oil discovery, as shown in Figure 4.3. The gap between discovery and consumption is widening and this will eventually lead to oil production peaking. Chevron, one of the worlds enlargedst oil companies, admits to the impending peak and decline of oil. An Oil production peak before or by 2010 seems now to be generally accepted. The not so distant future of Irelands energy market will then have to moot without oil.The oil market is global where the gas market is regional and this is where Ireland could really suffer in the long term. It is predicted that gas will outlast oil but gas has to be piped and Irelands geographical location causes problems. The discovery of the Corrib gas field is potentially very important as it offers temporary relief from increasingly undependable supplies of gas from the United Kingdom and Europe, says Colin Campbell, petroleum geologist (Campbell). In the near future with oil demand rising pushing up prices and in the distant future oil not been available, we must look to renewables now. The Corrib gas field is small and might get ten or more years out of it at the current rate of consumption but the Government should use this opportunity to draw on the gas to help support renewable energy.The Environment and EU DirectiveIrelands main source of energy is fossil fuels which produce vast quantities of CO2, add to humor change and which the EU intend to reduce. The emissions that are produced from burning fossil fuels are becoming more serious every year and a much discussed topic at national and international level.Climate Change and the Kyoto communications protocolFossil fuels constitute a significant repository of carbon buried deep under the ground. Burning them results in the conversion of this carbon to carbon dioxide, which is then released into the atmosphere. This results in an increase in the Earths levels of atmospheric carbon dioxide, which enhances the greenhouse effect and feeds to global warming (Wikipedia).As was seen in Figure 4.4, fossil fuels are a study electricity fuel for Ireland. Fossil fuels, particularly coal, contain a dilute hot material which is released into the environment leading to low levels of radioactive contamination. inwardly the EU burden sharing agreement to meet its obligation under the Kyoto Protocol, Ireland must stimulate its Greenhouse gas emissions at 13% above 1990 levels within the period 2008 to 2012 (Department of Communications, Marine and Natural Resources 1998).Intergovernmental Panel on Climate Change (IPCC) latest judgment Report was released on the 2nd of February 2007 in Paris. The report was prod uced by some 600 authors from 40 countries. According to the IPCC, the warming of the world is unequivocal, and that humans are very apparent (higher than 90% likelihood) behind the warming. The key conclusions werePossible temperature rise between 1.1C and 6.4C by 2100Sea level most believably to rise by 18-59cm (7in-23in)Artic summer sea ice disappears in second half of century augment in heatwaves very likelyIncrease in tropical storm intensity likelyConsidering overall greenhouse gas emissions, energy related CO2 emissions accounted for 51% in 1990 compared to a projected 66% in 2010 if we continue in the corresponding direction. Renewable energy would dramatically reduce Irelands CO2 emissions by replacing fossil fuels. This will take time, so if want to have any chance of meeting the requirements, we have to act now.EU DirectiveThe use of renewable energy has a legislative basis in the EU under Directive (2001/77/EC). The Directive asserts the European Countries need to pro mote renewables to contribute toenvironmental protection and sustainable development. In addition this can also create topical anesthetic employment, have a positive impact on kind cohesion, contribute to security of supply and raise it possible to meet Kyoto targets more quickly(Anon 2005).The directive forces Ireland to have an output of renewable violenceed electricity to 13.2% of total electricity consumed in Ireland by 2010. But the Government is hoping to have it up to 15% by 2010 through the Renewable energy Feed In Tariff (ReFIT) programme. The new Renewable energy Feed in Tariff (ReFIT) programme replaces the Governments previous support mechanism, the alternate(a) Energy Requirement (AER) programme and provides financial support of 119m to renewable energy projects over a fifteen year periodThe ReFIT programme will support the construction of an initial target of at to the lowest degree 400 megawatts (MW) of new renewable energy powered electricity generating plants. Its main aim is to increase the contribution of renewable energy sources to electricity production. The ReFIT programme will help make renewable energy competitive and is a move next to reaching the Kyoto Protocol and the EU directive. Failure to meet the Kyoto Protocol and EU Directive (2001/77/EC) will have serious financial implications.On April quaternate 2006 the European Commission launched legal proceedings against Ireland, for failing to meet the deadline of October 2003 for taking the necessary measures to transpose Community legislation on renewable electricity into national law. Ireland is now under pressure to act on renewable energy.Future PoliciesEU Leaders decided on Friday 9th of March 2007 to slash greenhouse gas emissions, which included a binding target for renewable sources to make up a fifth of EU energy use by 2020. The leaders move to a target of reducing EU greenhouse gas emissions by 20 per cent by 2020 and offered to go to 30 per cent if major nations s uch as the United States, Russia, China and India follow suit. According to a draft agreement, the EU will aim to go even further in the future, with cuts of 60 to 80 per cent by 2050.Reports of drastic future climate change in the wake of the IPCCs modern assessment, talk of a post Kyoto agreement is been debated. The recent EU summit outcome of reducing greenhouse gas emissions by 20 per cent will form the basis of the EUs position in international talks to replace the U.N. Kyoto Protocol, which expires in 2012. Whatever it may be called, it will aim to severely reduce Greenhouse Gases to coincide with Global Warming reports. each way it will mean a serious change for Governments and society.Chapter SummaryThe demand for gas and in particular oil is increasing largely due to the economic growth of China and India. The reserves at the routine show gas will outlast oil. Oil production is predicted to peak around 2010 but as oil resources decrease, demand for gas will increase to make up the slack which will result in gas production peaking kind of rather than later. The large growth in demand at present is increasing prices and with talk of oil production peaking and the politically unstable office in the Middle East, prices look set to continue escalating. Renewable energy can help Ireland reduce its dependence on imported fossil fuels.Irelands main energy source, fossil fuels, is seriously damaging the environment and the main cause of Global Warming. The Kyoto Protocol requires Ireland to reduce its CO2 emissions. Under EU legislation Ireland must increase the use of renewable energy to 13.2% of all electricity produced but the Government are aiming for 15% with the announcement of the ReFIT programme. The programme will help meet Kyoto and EU obligations. Recent announcement from the EU requires 20% of the EUs electricity generation mix be from renewable sources by 2020. This ambitious target will require serious consideration from the Government.CHAP TER FIVEThe Renewable Energy Options for the FutureIntroductionTo meet the future energy demands, the Government will have to put a lot more work into developing renewable sources of energy. The positive from this, is Ireland has vast potential for renewable energy production, especially wind. Although the Government are starting to take more notice of renewable energy technology. Within Budget 2007 Brian Cowan stated scheme of tax relief in place in the form of a deduction from a companys profits for corporate investment in renewable energy products in the solar, wind, hydro or biomass technology categories, shall be continued for a further five years, subject to EU approval (Cowan 2006). But when considering renewable energy options, it is important to realistically assess their full potential. The present renewable energy sources should be looked at in a view of their output and efficiency, then evaluate their future part in securing the countrys energy supply. deform Power rove power is one of the most mature renewable energy technologies to date and currently has a good record of reliability and availability. The wind resources in Ireland are among the trump out in the EU due to the strength of the Atlantic winds. A wind turbine in Ireland will deliver twice as much power as the same turbine in Germany. We are the envy of Europe because of our wind speeds (Seanad ireann 2005). drift energy has seen major advances in Ireland recently, especially in the last four years. Wind energy now has the largest installed capacity of all renewable energy technologies in Ireland (Figure 5.1). As per up to date statistics from EirGrid, there is currently a total of 744 MW worth of wind power committed to the main grid and an supernumerary 547.3 MW worth of energy from contracted wind farms currently in production to be connected at various stages in the future. (See attachment C and Appendix D)Renewable ConnectionsKinetic energy in airflows is used to run wind turbin es some are capable of producing 5 MW of power, but the most cost effective are currently 500 kW 1.5 MW. Conventional investment costs are about 1,100 per kW installed. Wind energy has been growing significantly over recent years and following the trend, wind power will keep going in the near future, Figure 5.2.Wind Generation since 1992 to 2007Onshore WindOnshore wind in Ireland is mainly concentrated on the west coast due to strong winds from the Atlantic. Wind-speed maps help decide on the locations by exhibit the wind potential of certain areas but turn ups close to the western sea shore is generally the best region, as with Tursillagh Wind Farm. (Example of Analysis of Wind Potential See Appendix E)Turbines at TursillaghWinds in an area are often monitored for a year and detailed maps constructed prior to wind generators being installed. Coastlines tend to be the windiest sites for turbines, because a primary source of wind is convection from the differential heating and coo ling of land and sea. The hard-on of a wind farm onshore is becoming square(a) forward with companies having gained much experience and knowledge. Ireland has had well developed onshore wind energy for many years and has the knowledge to develop bigger wind farms to help meet the countries energy demand.Offshore WindThe offshore electricity production in Ireland is marginal but has made a good start. Arklow Offshore Wind Power Plant is the worlds first offshore project to deploy giant wind turbines in excess of 3megawatts and is Irelands only offshore wind project. But already is showing great prospect, showing excellent reliability and availability, areas where wind power is mainly criticised. The site was chosen as tests proved to be one of the windiest areas in Europe.Offshore turbines cause less aesthetic controversy as usually can not be seen from the shore. It offers fewer obstacles and stronger winds but is also more unapproachable and the conditions are harsh, corrosive and can increase the costs of maintenance. Unlike with onshore wind farms, planning is not an issue. The biggest obstacle at present is the significant seat of government cost even compared to onshore wind. Irelands offshore potential is an untapped resource and must be harnessed to become a serious contributor to the Irish electricity mix. Offshore wind power generation should be recognised for what it is Irelands best option for meeting present renewable energy and CO2 targets.Planning for the FutureTo promote wind as one of the major sources of electricity in the future, it can be beneficial to look at a similar EU country with a successful wind market, for example Denmark. The ESB system is comparable in size to the west Denmark Eltra system.The Transmission System Operator (TSO) in Ireland, ESB National Grid (ESB NG), has asked for a report, explaining the management of the western Danish system Eltra with a focus on handling of wind production (Hilger 2004).This shows the le vel of sideline in the Danish system for wind. The ESB has spotted the potential of assessing Denmarks approach to wind for our own future development. Denmark has only modest wind speeds, compared to Irelands impressive wind energy potential. As can be seen in the circumstance Study (Appendix F), the key to Denmarks wind power success is the support from the interconnectors to other EU countries. Winds intermittence problem is compensated with bought in electricity from the Nordic power pool at the going rate.The major interest in Denmarks Eltra system for the future will come from Denmarks offshore development, in particular the Horns Rev Wind Park. The Horns Rev Wind Park is a show case of Danish initiative in the large scale promotion of renewable energy. Horns Rev is the largest offshore wind farm in the world, producing two per cent of Denmarks total energy consumption. Much can be learned from Horns Rev in planning the future of wind power generation in Ireland. The offshor e turbines produce 150 per cent more electricity than land based turbines. Also Denmarks offshore areas are restricted but the Irish situation is a decentralised approach where the pick of areas is open for personal initiative. The Horns Rev project was a result of fourteen years of research and initiated by the Danish Government which was the main factor for its commencement. The turbines used (Vestas V80) which can adapt the output of the turbine to suit the parameters of any electricity grid. Although a lot of planning and research went into Horns Rev, construction only took six months which was run through the summer months for alter weather conditions. And finally so successful was Horns Rev, an additional wind farm (Horns Rev 2) is to be built northeast of the existing farm. The new offshore wind farm and the landing facilities will be commissioned in May 2009. (See Appendix F, Case Study)Constraints of Wind PAnalysis of Energy Consumption in IrelandAnalysis of Energy Consum ption in IrelandIntroductionGeneral IntroductionThe following chapter will introduce the dissertation topic by means of its intended goals, outline of content within each chapter and the research methodology. The research goals present the authors aims to be achieved, core objectives and hypothesis to test. The chapters shall be briefly described as to their particular topic area. Research methodology will establish the research process, planning, data collection methods utilized and finally mention limitations encountered throughout completing the dissertation.Research GoalsAimTo investigate is renewable energy the way of the future, the potential of renewable energy sources and to analyse their long-term capability of meeting Irelands future energy needs.ObjectivesTo consider past and present trends of energy consumption in Ireland.To investigate the suitability of this technology for Ireland.To evaluate the environmental advantage of using the technology.To examine in detail the practical adoption of renewable energy technology in another country.To compare traditional energy sources against renewable sources.To examine the financial implications of changing from the traditional energy supply to a more renewable supply.HypothesisRenewable energy is a viable option for meeting energy requirements for the future of the Irish energy market.Outline of ChaptersChapter 1This chapter introduces the dissertation and details the authors core objectives to be researched. The structure of the dissertation is briefly described, which details the key sources of information followed by a short account of the chapters to follow.Chapter 2The dissertation begins with a short first chapter explaining what is known as renewable energy.Chapter 3Talks about potential future energy demands. Energy trends are evaluated to prepare an estimated energy forecast for Irelands future.Chapter 4Investigates into why a renewable energy future? The chapter deals with the rising demand and price of oil and gas. Also the concerns about climate change and Irelands commitment to the EUs Directives on the deployment of renewable energy are dealt within the chapter.Chapter 5The chapter reviews the renewable energy options available to Ireland. The options are assessed on the extent to which they could be used in meeting future demands.Chapter 6Examines the Governments present proposal Renewable Electricity A 2020 Vision, which is to set up an All-Island Energy Market between the Republic and Northern Ireland. The Chapter evaluates the proposal to secure future energy supply through renewable energy for the whole island.Chapter 7This chapter considers nuclear energy through certain areas which may be beneficial or not to Ireland.Chapter 8This is the final chapter of the dissertation where the author reaches conclusions from the research carried out to date, followed by recommendations and areas for further study.Research MethodologyResearch may be defined as, the systemati c study of materials and sources in order to establish facts and reach new conclusions (Concise Oxford English Dictionary 2005).This section outlines the research methods used to prepare this dissertation. The structure of this dissertation presents the findings of research, clearly identified, which was conducted by the author. Also aspects of data collection associated with problems encountered and limitations will be summarized.Research ProcessPreliminary research began during the Authors placement year (year 3 of BSc Construction Economics Management in Limerick Institute of Technology). As part of the year a dissertation proposal submission was required. An initial investigation on the availability of information was carried out and being satisfied that the information available was sufficient, I decided to continue with the topic. The initial sources primarily included books, Internet, papers and magazines.Research PlanningFor the research process consideration was given to t he possible methods of approach to the actual dissertation. To carry out the research effectively and in a detailed manner a research plan and programme was established. This plan consisted of giving sufficient time for the detailed research of material both published and unpublished. From this the author got a detailed understanding of the topic and the exact focus of the dissertation was established along with the content and scope of the various chapters.After choosing the title, aim, objectives and hypothesis, a detailed plan had to be formulated to meet each objective of the dissertation. This proved vital to the success of the dissertation, given the limited time frame to review material, engender results and complete the dissertation. Due to the amount of publications and information that needed reviewing for inclusion into the dissertation file, reading and analysis was continuously ongoing. All articles of information were scanned generally to assess their suitability and a ll relevant information marked accordingly. All relevant information, once analysed, was categorized based on its relevance to a given chapter.Data Collection MethodsIn order to test the hypothesis of this dissertation effectively detailed information had to be sought on all aspects of renewable energies and the Irish energy market.The types of data used for compiling this dissertation came from both primary and secondary sources. Material from both sources was read in detail and any information relevant to any aspect of the dissertation topic was highlighted and noted. For the actual structure of the separate chapters, this information was subdivided into separate files for each proposed chapter.Primary SourcesThe dissertation utilized primary sources, as work contained provided accurate information. The volume of the information was obtained from Government organisations and EU reports. The up to date factor of the reports was its main advantage. Other organisations such as Sustai nable Energy Ireland published reports which proved very beneficial. As the dissertation subject is topical at present, there have been many related conferences and the proceedings published. Official Government publications were helpful especially for information relating to the All Island Energy Market. Other official publications from the EU were used to gather information on EU Directives and the Kyoto Protocol. Finally structured interviews were conducted in relation to setting up and operating wind farms as the results offered accurate first hand information. Past dissertations have been utilized but for the purpose of guidance.Secondary SourcesAn in depth documentary review was undertaken by the author, which involved examining various sources of information for factual information. This information was taken from construction journals, textbooks, brochures and magazines. Text books were used only for background information. Magazines and national papers proved helpful in kee ping up with new developments affecting the topic, for example the Budget and Government publications. As the dissertation required up to date information on the topic, a large quantity of information was obtained from the Internet.LimitationsThere were a number of difficulties encountered during the research of this dissertation. The main concern for the author was the realization that new information on the chosen topic was constantly being up dated with new developments. As the dissertation is somewhat based on what may happen in the future, the conclusions and recommendations are based on educated assumptions.There exists a lack of published work in relation to the All Island Energy Market, as the consultation period is still on going. Contact with the Department of Communications, Marine and Natural Resources was made with regard to the topic and all other topics relating to the dissertation. The author was informed that the most up to date information would be available in the Governments Energy White Paper 2007 Delivering a Sustainable Energy Future for Ireland and that information contained within it could not be released until the Governments official launch on the 12th of March 2007. Due to time constraints the author was not able to exploit this source.Based on the limited amount of information available the author utilized a significant amount of secondary sources. Also research questionnaires had to be abandoned due to a lack of response from organisations. Although certain information available was limited, with continued research and perseverance though all possible avenues it is believed that suitable material was compiled delivering a complete dissertation on the subject matter.CHAPTER TWOWhat Is Renewable Energy?IntroductionRenewable energy comes from energy sources that are continuously replenished by nature. They are non-fossil energy sources that are not depleted by utilization. The main sources of renewable energy are the wind, the sun (s olar energy), water (hydropower, wave and tidal energy) and biomass (wood, biodegradable waste and energy crops).Renewable energy sources are those which are effectively inexhaustible (such as wind, wave, solar, hydro etc) or which are replenished at or about their rate of consumption (such as managed forests and energy crops and other forms of biomass) (Anon 2005).What are the Benefits of Renewable energy?Renewable energy resources are clean sources of energy. They can be harnessed without damaging the environment, unlike using fossil fuels which release carbon dioxide (a greenhouse gas) and other harmful pollutants into the atmosphere.Increasing the use of renewable energy is therefore a key strategy for reducing greenhouse gas emissions and meeting Irelands Kyoto commitments.Renewable energy resources will not become exhausted. Unlike finite fossil fuels, renewable energy resources are continuously replenished and will not run out.Renewable energy resources are indigenous resourc es. Ireland is heavily reliant on imported fossil fuels. We now import around 89% of the fuels we need for energy. By tapping the renewable energy resources with which Ireland is richly endowed, we could reduce this reliance on imports. By increasing our use of renewable resources, we can achieve a more secure and stable energy supply for the long term (Sustainable Energy Ireland a).Chapter SummaryRenewable energy generally refers to energy derived from non-fossil fuel resources (excluding nuclear). Renewable energy has become more popular in recent times as talks of global warming increase internationally and exhaustion of fossil fuels. Renewable energy will benefit the environment and help reduce our dependency on depleting sources of energy.CHAPTER THREEIrelands Potential Energy NeedsIntroductionTo assess the potential of renewable sources sustaining Irelands energy needs in the future, firstly energy trends have to be evaluated to estimate the future requirements. It is impossib le to know for sure what the future will hold but by reviewing different forecasts, a reasonable estimate can be made.Energy TrendsEnergy trends of the past fifteen years will give a good review of Irelands energy growth. It was within this time that the country experienced significant economic growth which was seen in the energy sector. The amount of energy consumed is shown through the Total Primary Energy Requirement (TPER).Total Energy Requirement (TER) figures represent the total Irish electricity generation at the plant exported level plus imports, less exports. The TER is the amount of electricity required to meet total final consumption in the Republic of Ireland including an allowance for transmission and distribution losses (Anon 2005).Figure 3.1 shows the Total Primary Energy Requirement (TPER) of the Republic of Ireland, broken down by fuel type, over the period 1990 to 2000. Estimates for the period 2001 to 2010 are also included.This figure shows that there was rapidly increasing growth in energy demands in the 90s and in particular, the mid 90s to 2000. It also shows a high dependence on the oil and gas.Energy ForecastsThe Government document, All-Island Energy Market Renewable Electricity A 2020 Vision Preliminary Consultation Document, (Anon 2005), forecasts energy demands by firstly modifying the 2005 2011 median TER values so as to account for generation plant house load, and then determining the values for 2012 2020 at the assumed growth rates of 3% per annum between 2012 and 2015, and of 2% per annum between 2015 and 2020. This can be clearly seen in Table 3.1. These facts are based on the future for the whole island of Ireland, a joint north and south venture of meeting future energy demands and include Northern Ireland which is discussed in Chapter Six.The above forecast is not alone in believing that there will be a steady growth, although slightly less over a longer period of time. The report (Howley et al 2006) assumes electricity demand to grow significantly. Table 3.2 from the report shows the predicted growth. The prediction assumes the CO2 costs 15/tonne in 2010 and 30/tonne in 2020.Chapter SummaryThe past energy trends showed that there has been a constant rise in energy demand and this is reflected in the forecasts. The two different reports predicted to 2020 and show a similar prediction. It can then be assumed that to 2010 a 3.0 4.0% increase can be expected and from 2010 2020, a lesser 1.0 2.0%. The forecast for the generating fuel is predicted through past trends and present economic development, predicting oil to be eliminated by 2010 and gas to dominate. Although renewables are predicted to increase, early forecasts report they will only have a minor impact.CHAPTER FOURWhy a Renewable Energy Future?IntroductionThe future of Irelands energy supply is changing and it can not be stopped but we can adapt. The foremost important issue for the Government is to secure the countries future energy suppl y. Irelands geographical location and fuel resources means it is of critical importance that the future energy supply is secured now before it is too late. Ireland is too dependant on import fossil fuels for energy and so we need to become more independent, which renewable energy can provide. While Irelands imports of fossil fuels for energy still stand at about 85 per cent, much higher than the EU average of 50 per cent, there is a definite shift towards renewables. But there are other factors steering Ireland towards renewable sources, including EU and Kyoto responsibilities.Oil and Gas DepletionOil and gas are a finite resource and there so going to completely run out some day. The demand for gas and in particular oil is increasing. This is mainly due to significant economic growth of China and India. The report Exxon-Mobils view of the future of oil and gas predicts demand is expected to rise through the year 2010 at a rate of about 2 per cent per year for oil and 3 per cent per year for gas (Longwell), as shown in Figure 4.1. This is leading to a rise in price, Figure 4.2, which already is affecting Ireland.As stated in the EU Green Paper in 2006, Oil and gas prices are rising. They have nearly doubled in the EU over the past two years, with electricity prices following. This is difficult for consumers. With increasing global demand for fossil fuels, stretched supply chains and increasing dependence on imports, high prices for oil and gas are probably here to stay (Anon 2006).Rising oil pricesIn its 2001 review BP commented The worlds oil R/P (reserve to production) ratio has fallen modestly since 1990 as world oil production growth has outpaced additions to reserves (Busby 2002). A chart in the 2001 review shows 1990 as the year when the R/P peak ratio of 44 was passed, reducing to 40 by the end of 2000. At the end of 2002 the R/P ratio had reduced further to 39, to rise to 41 at the end of 2003, dropping back to 40.5 at the end of 2004, but shown at 40. 6 at the end of 2005. As production continues to rise and additions to reserves fail to match it, the ratio of oil reserves to production (R/P) will continue to decline and the price of crude oil will rise. The world gas R/P ratio in 2005 was 65.1, compared to 40.6 for oil. At 2005 production rates, gas reserves would provide a source of energy for a further 24 years after oil exhaustion.But when oil supplies starts to run out, more gas will be used as a substitute, hence increasing gas depletion. So if oil production peak is predicted at 2010, gas production peak should follow bout the year 2020.The problem starts to become apparent when you realise the decline of oil discovery, as shown in Figure 4.3. The gap between discovery and consumption is widening and this will eventually lead to oil production peaking. Chevron, one of the worlds largest oil companies, admits to the imminent peak and decline of oil. An Oil production peak before or by 2010 seems now to be generally accepted . The not so distant future of Irelands energy market will then have to contend without oil.The oil market is global where the gas market is regional and this is where Ireland could really suffer in the long term. It is predicted that gas will outlast oil but gas has to be piped and Irelands geographical location causes problems. The discovery of the Corrib gas field is potentially very important as it offers temporary relief from increasingly unreliable supplies of gas from the United Kingdom and Europe, says Colin Campbell, petroleum geologist (Campbell). In the near future with oil demand rising pushing up prices and in the distant future oil not been available, we must look to renewables now. The Corrib gas field is small and might get ten or more years out of it at the current rate of consumption but the Government should use this opportunity to draw on the gas to help support renewable energy.The Environment and EU DirectiveIrelands main source of energy is fossil fuels which produce vast quantities of CO2, add to climate change and which the EU intend to reduce. The emissions that are produced from burning fossil fuels are becoming more serious every year and a much discussed topic at national and international level.Climate Change and the Kyoto ProtocolFossil fuels constitute a significant repository of carbon buried deep under the ground. Burning them results in the conversion of this carbon to carbon dioxide, which is then released into the atmosphere. This results in an increase in the Earths levels of atmospheric carbon dioxide, which enhances the greenhouse effect and contributes to global warming (Wikipedia).As was seen in Figure 4.4, fossil fuels are a major electricity fuel for Ireland. Fossil fuels, particularly coal, contain a dilute radioactive material which is released into the environment leading to low levels of radioactive contamination.Within the EU burden sharing agreement to meet its obligation under the Kyoto Protocol, Ireland must stabilise its Greenhouse gas emissions at 13% above 1990 levels within the period 2008 to 2012 (Department of Communications, Marine and Natural Resources 1998).Intergovernmental Panel on Climate Change (IPCC) latest Assessment Report was released on the 2nd of February 2007 in Paris. The report was produced by some 600 authors from 40 countries. According to the IPCC, the warming of the world is unequivocal, and that humans are very likely (higher than 90% likelihood) behind the warming. The key conclusions werePossible temperature rise between 1.1C and 6.4C by 2100Sea level most likely to rise by 18-59cm (7in-23in)Artic summer sea ice disappears in second half of centuryIncrease in heatwaves very likelyIncrease in tropical storm intensity likelyConsidering overall greenhouse gas emissions, energy related CO2 emissions accounted for 51% in 1990 compared to a projected 66% in 2010 if we continue in the same direction. Renewable energy would dramatically reduce Irelands CO2 emissions by replacing fossil fuels. This will take time, so if want to have any chance of meeting the requirements, we have to act now.EU DirectiveThe use of renewable energy has a legislative basis in the EU under Directive (2001/77/EC). The Directive asserts the European Countries need to promote renewables to contribute toenvironmental protection and sustainable development. In addition this can also create local employment, have a positive impact on social cohesion, contribute to security of supply and make it possible to meet Kyoto targets more quickly(Anon 2005).The directive forces Ireland to have an output of renewable powered electricity to 13.2% of total electricity consumed in Ireland by 2010. But the Government is hoping to have it up to 15% by 2010 through the Renewable energy Feed In Tariff (ReFIT) programme. The new Renewable energy Feed in Tariff (ReFIT) programme replaces the Governments previous support mechanism, the Alternative Energy Requirement (AER) programme and prov ides financial support of 119m to renewable energy projects over a fifteen year periodThe ReFIT programme will support the construction of an initial target of at least 400 megawatts (MW) of new renewable energy powered electricity generating plants. Its main aim is to increase the contribution of renewable energy sources to electricity production. The ReFIT programme will help make renewable energy competitive and is a move closer to reaching the Kyoto Protocol and the EU directive. Failure to meet the Kyoto Protocol and EU Directive (2001/77/EC) will have serious financial implications.On April 4th 2006 the European Commission launched legal proceedings against Ireland, for failing to meet the deadline of October 2003 for taking the necessary measures to transpose Community legislation on renewable electricity into national law. Ireland is now under pressure to act on renewable energy.Future PoliciesEU Leaders decided on Friday 9th of March 2007 to slash greenhouse gas emissions, which included a binding target for renewable sources to make up a fifth of EU energy use by 2020. The leaders committed to a target of reducing EU greenhouse gas emissions by 20 per cent by 2020 and offered to go to 30 per cent if major nations such as the United States, Russia, China and India follow suit. According to a draft agreement, the EU will aim to go even further in the future, with cuts of 60 to 80 per cent by 2050.Reports of drastic future climate change in the wake of the IPCCs recent assessment, talk of a post Kyoto agreement is been debated. The recent EU summit outcome of reducing greenhouse gas emissions by 20 per cent will form the basis of the EUs position in international talks to replace the U.N. Kyoto Protocol, which expires in 2012. Whatever it may be called, it will aim to severely reduce Greenhouse Gases to coincide with Global Warming reports. Either way it will mean a serious change for Governments and society.Chapter SummaryThe demand for gas and in part icular oil is increasing largely due to the economic growth of China and India. The reserves at the moment show gas will outlast oil. Oil production is predicted to peak around 2010 but as oil resources decrease, demand for gas will increase to make up the slack which will result in gas production peaking sooner rather than later. The large growth in demand at present is increasing prices and with talk of oil production peaking and the politically unstable situation in the Middle East, prices look set to continue escalating. Renewable energy can help Ireland reduce its dependence on imported fossil fuels.Irelands main energy source, fossil fuels, is seriously damaging the environment and the main cause of Global Warming. The Kyoto Protocol requires Ireland to reduce its CO2 emissions. Under EU legislation Ireland must increase the use of renewable energy to 13.2% of all electricity produced but the Government are aiming for 15% with the announcement of the ReFIT programme. The progr amme will help meet Kyoto and EU obligations. Recent announcement from the EU requires 20% of the EUs electricity generation mix be from renewable sources by 2020. This ambitious target will require serious consideration from the Government.CHAPTER FIVEThe Renewable Energy Options for the FutureIntroductionTo meet the future energy demands, the Government will have to put a lot more work into developing renewable sources of energy. The positive from this, is Ireland has vast potential for renewable energy production, especially wind. Although the Government are starting to take more notice of renewable energy technology. Within Budget 2007 Brian Cowan stated scheme of tax relief in place in the form of a deduction from a companys profits for corporate investment in renewable energy products in the solar, wind, hydro or biomass technology categories, shall be continued for a further five years, subject to EU approval (Cowan 2006). But when considering renewable energy options, it is important to realistically assess their full potential. The present renewable energy sources should be looked at in a view of their output and efficiency, then evaluate their future part in securing the countrys energy supply.Wind PowerWind power is one of the most mature renewable energy technologies to date and currently has a good record of reliability and availability. The wind resources in Ireland are among the best in the EU due to the strength of the Atlantic winds. A wind turbine in Ireland will deliver twice as much power as the same turbine in Germany. We are the envy of Europe because of our wind speeds (Seanad ireann 2005).Wind energy has seen major advances in Ireland recently, especially in the last four years. Wind energy now has the largest installed capacity of all renewable energy technologies in Ireland (Figure 5.1). As per up to date statistics from EirGrid, there is currently a total of 744 MW worth of wind power connected to the main grid and an additional 547. 3 MW worth of energy from contracted wind farms currently in production to be connected at various stages in the future. (See Appendix C and Appendix D)Renewable ConnectionsKinetic energy in airflows is used to run wind turbines some are capable of producing 5 MW of power, but the most cost effective are currently 500 kW 1.5 MW. Conventional investment costs are about 1,100 per kW installed. Wind energy has been growing significantly over recent years and following the trend, wind power will keep going in the near future, Figure 5.2.Wind Generation since 1992 to 2007Onshore WindOnshore wind in Ireland is mainly concentrated on the west coast due to strong winds from the Atlantic. Wind-speed maps help decide on the locations by showing the wind potential of certain areas but sites close to the western sea shore is generally the best region, as with Tursillagh Wind Farm. (Example of Analysis of Wind Potential See Appendix E)Turbines at TursillaghWinds in an area are often monitored for a year and detailed maps constructed prior to wind generators being installed. Coastlines tend to be the windiest sites for turbines, because a primary source of wind is convection from the differential heating and cooling of land and sea. The erection of a wind farm onshore is becoming straight forward with companies having gained much experience and knowledge. Ireland has had well developed onshore wind energy for many years and has the knowledge to develop bigger wind farms to help meet the countries energy demand.Offshore WindThe offshore electricity production in Ireland is minimal but has made a good start. Arklow Offshore Wind Power Plant is the worlds first offshore project to deploy giant wind turbines in excess of 3megawatts and is Irelands only offshore wind project. But already is showing great prospect, showing excellent reliability and availability, areas where wind power is mainly criticised. The site was chosen as tests proved to be one of the windiest areas in E urope.Offshore turbines cause less aesthetic controversy as usually can not be seen from the shore. It offers fewer obstacles and stronger winds but is also more inaccessible and the conditions are harsh, corrosive and can increase the costs of maintenance. Unlike with onshore wind farms, planning is not an issue. The biggest obstacle at present is the significant capital cost even compared to onshore wind. Irelands offshore potential is an untapped resource and must be harnessed to become a serious contributor to the Irish electricity mix. Offshore wind power generation should be recognised for what it is Irelands best option for meeting present renewable energy and CO2 targets.Planning for the FutureTo promote wind as one of the major sources of electricity in the future, it can be beneficial to look at a similar EU country with a successful wind market, for example Denmark. The ESB system is comparable in size to the west Denmark Eltra system.The Transmission System Operator (TSO ) in Ireland, ESB National Grid (ESB NG), has asked for a report, explaining the management of the western Danish system Eltra with a focus on handling of wind production (Hilger 2004).This shows the level of interest in the Danish system for wind. The ESB has spotted the potential of assessing Denmarks approach to wind for our own future development. Denmark has only modest wind speeds, compared to Irelands impressive wind energy potential. As can be seen in the Case Study (Appendix F), the key to Denmarks wind power success is the support from the interconnectors to other EU countries. Winds intermittence problem is compensated with bought in electricity from the Nordic power pool at the going rate.The major interest in Denmarks Eltra system for the future will come from Denmarks offshore development, in particular the Horns Rev Wind Park. The Horns Rev Wind Park is a show case of Danish initiative in the large scale promotion of renewable energy. Horns Rev is the largest offshore wind farm in the world, producing two per cent of Denmarks total energy consumption. Much can be learned from Horns Rev in planning the future of wind power generation in Ireland. The offshore turbines produce 150 per cent more electricity than land based turbines. Also Denmarks offshore areas are restricted but the Irish situation is a decentralised approach where the pick of areas is open for private initiative. The Horns Rev project was a result of fourteen years of research and initiated by the Danish Government which was the main factor for its commencement. The turbines used (Vestas V80) which can adapt the output of the turbine to suit the parameters of any electricity grid. Although a lot of planning and research went into Horns Rev, construction only took six months which was run through the summer months for improved weather conditions. And finally so successful was Horns Rev, an additional wind farm (Horns Rev 2) is to be built northeast of the existing farm. The new off shore wind farm and the landing facilities will be commissioned in May 2009. (See Appendix F, Case Study)Constraints of Wind P

Performance Measurement In The Public Sector Finance Essay

Performance Mea reliablement In The Public Sector Finance EssayIn recent years establishments within bay windowada keep back been set about increase pressure from the unrestricted to be to a greater extent financially accountable, transp arnt and responsible when it comes to managing tax dollars. In large part, this is due to several frugal and social pressures, such as an aging population, plump outary deficits and several(a) financial s mintdals, which make the need for effective and effectual financial directment a pressing matter. G everyplacenments have been developing systems, approaches and processes to continually ensure value for m integrityy, including integrating orphic orbit practices into the semi universal vault of heaven (e.g. New Public Management and Public Sector Renewal). unitary such private sector practice is the extensive use of and reliance on surgical process measures, which argon used to obtain tellation thought to be critical to ensuring effective and competent financial attention, such as tracking authorities debt, program success, and forecasting future programming needs. This paper allow certify and explore the theory of exertion measuring stick, including its advantages and disadvantages. A case study will then be presented, which will outline, apply, and assess financial deed measures used by the Ontario g all overnment on its provincial budget covering the period from 2002 to 2007. The paper will then conclude with observations and recommendations for more effective use of exploit measures and a better understanding of the benefits and, perhaps more importantly, the limitations of performance measurement. Performance measures, while a serviceable tool, argon non sufficient to guarantee effective and efficient caution of public resources.Context for the need for performance measure in the public sectorGovernments are increasingly grappling with complex social and economic pressures. For instance, t he aging of the population is expected to have important impacts on governments revenues and expenditures. With soaring health do by constitutes as the population ages, Roy Romanow (2002) in his report on the future of health care in Canada estimates that annual per capita expenditure on people aged 65 and over is three times as very much as the average of all age group spending (p.57).Looking at Ontarios annual report and consolidated financial statements between 2002 and 2007, the province has seen a signifi shadowt increase in its expenditure in health and long term care where the province increased its expenditure by approximately 9.9 one thousand thousand dollars or a 36.8 percent spending increase over five years. Overall expenditures during the analogous time period have increased by 20.4 cardinal dollars or a 28.6% increase. This essentially means that approximately 49% of the increase in expenditure went to health care spending. Ontarios revenues on the other hand inc reased by 21.8 billion dollars or a 31.8% increase. However, net debt has increased by 8.5 billion dollars or a 6% increase (Please refer to appendage 1.1). As these statistics image, expenditures on health care represent a signifi chiffoniert proportion of provincial spending, a situation that may be exacerbated by an aging population.Furthermore, Saks and Haccoun (2004) estimates that Canadian labour supply shortage will reach the one million plateau by year 2020, which preserve have significant adverse set up on the Canadian economy and its provincial and territorial counterparts in terms of ability to advance taxes and reserve current program expenditures and ensure a sustainable economy in the future.As a result of these pressures and complexities, governments have started to examine its role in society and the unlike ship canal through which programs are delivered and managed. For instance, governments are increasingly delivering programs and services through partnershi ps as a means of up(p) efficiency in the delivery of services to Canadians. With increasingly complex and varied class of delivery of public services, at that place exists a real need to identify separate roles and responsibilities of participating partners and to develop expectations, standards, and measures of performance to ensure transparency, accountability, and sustainability.What is Performance Measure Definitions and Considerations unmatchable of the results of this movement for better public service delivery is the integration of private sector practices, including performance measurement to ensure transparency, accountability and sustainability even in the facet of pressures and complexities facing the public sector. In recent years, several developed countries and some developing countries have made increasing use of performance concepts and results indicators, both in their managerial practices and in the formulation and execution of public programs (Performance Meas urement in Public Administration, p. 649-650). Performance measurement is also considered by some experts as the original step toward improving the performance of a public-sector organization, and, if backed by an appropriate incentive system, it can help shift organizational focus from inputs to outputs and outcomes and thus alter efficiency and effectiveness (Performance Measurement in Public Administration, p.663). It is essentially the collection of about an organizations performance indexes that will equip a program manager to measure its changes in performance over time (Carroll and Dewar, 2002). Performance measures are conceived to be first utilise in the public sector in 1960, when calls for the improvements in processes in which the way the government manages its resources or inputs to maximize efficiency and effectiveness started becoming more pronounced. It is argued that by tracking performance, the government is better able to meet its budget goals and objectives .There are many factors to consider when developing or applying a performance measure in an organization. The main factor that must be considered is cost. Can the organization afford the costs associated with developing, maintaining and implementing a performance measure? Clear, concise and realistic performance goals are needed. The performance measure must be to the full communicated to everyone in the organization, as the success of a performance measures implementation depends on everyone buying into the concept. Once a performance measure is approved, an appropriate rewards system should be intromitd, as well as a system for modifying the performance measures if the organizations objectives are not cosmos realized. The organization must also ensure that individuals who have to work with the performance measures within the organization are well informed about the process and the benefits of the system and how to implement it (Mayne, 2005). In other tools, realizing and achiev ing the full benefits of performance measurement may be compromised or limited if analysts/managers fail to appreciate and understand the nature, purpose, meaning, and limitations of the indicators.Benefits of Performance MeasurementAs the economy grow, the demand for government services increases as well. Ontarios gross domestic product (gross domestic product) increased from 493.1 billion dollars in 2002 to 586.2 billion dollars in 2007 or an increase of approximately 18.9% (Please refer to appendix 1.6). This means that there could be an increased demand for government programs and services and, likely, for the Ontario governments manpower. As programs, service, and government workforce grow, there would be a need to track the various programs the government provides. Performance measures can be beneficial in a given organization in various ways if implemented properly. Some of these benefits include workforce and program management, assessment of program effectiveness, and incr eased accountability.Performance measures assist in organizing entropy that will help track, assess and psychoanalyze how various programs are progressing over time. It is a control measure that will make sure that the public sector is delivering services to the public that will maximize the publics utility level and at the kindred time ensure that resources are utilized efficiently and effectively(Carroll and Dewar, 2002). The management of these processes will also ensure compliance within various departments where the process can be standardized across various departments to ensure compliance. The application of performance management hopes that managers would change from being inwardly focussed to being outwardly focused on public conditions, needs and problems (Waldt, 2004, p.21). By helping managers think outside the box, performance measure will hope in full generate innovation that can be fed back into the policy process to merged these innovations. However, this will on ly work if senior management is able to sell this idea to everyone in the organization that will help break down resistance. By overcoming these barriers, an organization can now look ahead and collect various teaching regarding its performance, how well it is doing in comparison to previous years?, and how it is performing against other organizations.Performance measures can also help in improving public accountability. Outcomes information will inform public debate and the political process, and thereby providing direction to Government(Waldt, 2004, p. 19). In recent years, various government sectors have faced heavy scrutiny from the tax payer, electorate, electrical resistance parties and the media. This is due to mismanagement of government funds such as the sponsorship scandal. This is one of the reasons why various performance control measures are increasingly filtering through the public sector. Since performance measure requires information gathering, maintaining and anal yzing, then its proper implementation improves government accountability, transparency and responsibility. Since the public sector is more open to scrutiny because of the advancement of the information technology and the availability of legislations such as the Freedom of Information Act, this will further assist in ensuring that public sector managers are more conscientious. Although one must ask whether or not performance measures in the public sector exist because there is a real need to improve performance or a perceived need for one. If the cost of performance measure outweighs its benefits, then performance measures can be seen as a ploy by the government to provide peace of mind to the public. Then the cost of performance measure is essentially the cost of buying peace of mind which is a brag on its own.Finally, another benefit of proper application and implementation of performance measure is through benchmarking (Carroll and Dewar, 2000). Benchmarking allows government age ncies to create and compile best practice information that can help other agencies achieve their goals. This information may be useful to other organizations to help make their operations effective. A word of prudence with utilizing benchmarks is that each organization is different from one another. Therefore, these benchmarks must be modified to fit into the organizations culture, goals and objectives. Though this may be helpful, the flip side is a emf to promote laziness and block innovation (De Bruijn, 2007).Limitations to the Use/Application of Performance MeasurementThe main idea behind performance measures is to be able to overturn cost and at the same time provide services at the least possible cost without jeopardizing the quality of service. However, the application of performance measure only when does not mean that governments will start realizing the benefits associated with this practice. Some may question the underlying reason why performance measures are needed in the public sector. It can be argued that performance measures were implemented in another country or province and they have been successful at achieving goals through the use of performance measures as a tool (Carroll and Dewar, 2002). However, just because performance measurement works in one particular organization does not necessarily mean that it can be fully integrated in another organization and be expected to provide the same level of success (the idea of benchmarking). This brings into light various motives or the driving force for the use of performance measures. Do public sector analysts and managed really believe that performance measurement contributes to more effective financial management? Or are they simply forced to include performance measures to fulfill reporting and financial requirements from the Center of government (e.g. Treasury Board)? Or are they just following a trend or a passing fad?The implementation of performance measure in the public sector can have a few disadvantages. These limitations include the manipulation of the performance measure system, challenges and difficulties in quantifying qualitative objectives (Carroll and Dewar, 2002). One of the major problems of performance measure is the manipulation of the performance system to maximize rewards by a particular individual/organization. Performance measure objectives can be interpreted in a variety of ways that can potentially give way to manipulate the system to allow a given organization to meet its objectives on paper but not in reality. One example of how performance measure can be manipulated happened in Australia when an Aboriginal tribe was informed that its sanitation and other subsidies would depend on their performance in keeping sanitary facilities clean, they did so most effectively by thoroughly cleaning the toilets, and then closing them to the public. (p. 660, Performance Measurement in Public Administration) Performance measure can be manipulated by defining the goal and manipulating other variables to meet its objectives. For instance, if a police forces objective is to decrease abomination rate in a given community, it can essentially meet its goal without any real changes to the crime rate in the community in question by choosing not to report sure crimes. This practice is a waste of resources that could have been used to fund other programs that are more efficient in nature. As illustrated by the examples given, the application of performance measure can potentially generate good performance on paper but not in reality.Another disadvantage of performance measure is the challenges associated to applying it to the public sector (Graham, 2007). This is because private sector is mostly concerned with earnings maximization which is a quantifiable objective. The public sector on the other hand is concerned with measuring qualitative objectives and quantifying its results. Qualitative measures can be quite challenging because it involv es inborn comment of quality. For instance, if the governments goal is to measure the quality of secondary education provided in Ontario, and then it becomes hard to determine how well the ministry of education is performing. The reason for this is because there are a variety of ways to measure quality, where is the data coming from? What measures are used? Who measures performance? And whether or not there is a conflict of interest that will manipulate the system. Finally, quality of education may not be measured until a few years later when the students graduate high school. The application of performance measure also calls for rewarding good performance and punishing poor performance (Waldt, 2004). The implementation of this premise may be a challenge in the public sector because politicians can over ride budget allotment. If for instance, health care is the governments top priority, if for instance health care is the worst performing ministry within the public sector then thi s may be a challenge. However, this will not work in the public sector because politicians can opt to discount the performance measure in place and increase financial support for the ministry of health.It is also useful to note that the implementation of performance measurement in the public sector could potentially be more challenging than in the private sector, in part because of differing operations/service goals. While the private sectors bottom line is profit maximization, the public sector involves multiple competing stakeholders with multiple goals (Graham, 2002). For instance, there are certain stakeholders who believe in maintaining balanced books and reducing debt, while there are others who believe that the government should consistently provide for social programs, even if this implies financing services through deficit. Furthermore, a performance measures effectiveness may not be fully utilized because politicians can choose to ignore these measures or can over ride b udget allocation found on performance measures.Case report card Ontario financial Performance MeasureA budget is one of the most important pieces of legislation in any given government because it outlines how the government plans to manage its limited resources effectively. A well-conceived, -applied, or -implemented budget allows the organization to realize its goals and objectives with maximum efficiency and effectiveness (McKinney, 2004, p.264). For many years, the public sector has been experiencing increased pressure from the public to provide the best quality of service at the least possible cost. Furthermore, governments have been facing increased pressure from the public to reduce its debt, otherwise debt go costs will be transferred to future generations at a higher cost (principal plus interest charges). As the government becomes larger, the role of financial management plays an indispensable role in the achievement of an organizations objective. It is the fuel that gi ves life and substance to the engine of public administration (McKinney, 2004, p.1). Along with its growth, the number of competing stakeholders also increases and therefore, the process of allocation becomes more complicated. This is the very reason why governments are increasingly finding ways to improve its financial reporting such as the adoption of accretion based accounting and the implementation of the Public Sector Accounting standards. These are some measures used in the private sector that are now being applied in the public sector. In theory, the purpose of the application of these measures is to be able to make governments responsible, responsive and fully accountable.This section will explore and analyze the financial performance measures used by the government of Ontario to assess its effectiveness. The government of Ontarios financial analysis measures three areas which includes sustainability, flexibility and vulnerability. Sustainability measures the governments ab ility to meet its financial obligations. Sustainability measures Assets to Liabilities, Financial Assets to Liabilities, and pull in Debt to Total Annual Revenue, engagement Debt to GDP and Deficit to GDP. Flexibility measures the governments ability to move around its financial obligations across programs or across various years to be able to provide the best possible programming level. Flexibility measures Public Debt Charges to Revenue and Net Book Value to Cost of with child(p) of the United States Assets. Finally, vulnerability measures the extent to which the government is dependent on or can be influenced by external organizations such as the federal government, foreign institutions and foreign governments. Vulnerability measures Government Transfers to Total Revenue and net Foreign Currency Debt to Total Debt.SustainabilityAssets to Liabilities measures the governments ability to meet its financial obligations through the liquidation of its summations. In the private sector depending on the company, an acceptable ratio is 21. However, looking at the Ontario governments assets to liability ratio, this ascertain hovers around 0.271 0.311 between 2002 and 2007. (Please refer to appendix 1.3). This figure may be way below the private sector expectations but the chances of a government experiencing bankruptcy (especially in developed countries) is quite low, since governments race to have the ability to raise money by issuing debt to cover liabilities. Therefore, the use of this measure is limited to just merely observing upward or downward trends. Furthermore, with the implementation of full accrual based accounting in the public sector it becomes hard to determine the exact total value of the governments assets. These assets include heritage assets where a market value is non- existent or there are competing estimates. It becomes a challenging task to assign a value on such an asset, or the asset may be of value to the government who owns the as set but not to anyone else. Given the challenges associated with determining an actual value for an asset, care should be taken when using this ratio as a financial performance indicator since its accuracy can be challenged.Financial Assets to Liabilities measures the governments ability to raise cash quickly or its liquidity to cover its liabilities. The Ontario governments ratio ranges from 0.181 to 0.231, where it reached its peak in year 2004/2005 and in 2006/2007 (measured at 0.211). (Please refer to appendix 1.3)Net Debt to Total Annual Revenue measures the governments net debt in coition to its ability to generate revenues. This ratio reached its peak over a five year embroil at 2.031 in 2003/2004 and 1.561 in 2006/2007. (Please refer to appendix 1.3) Since 2003/2004, the Ontario government has been able to reduce its net debt in relation to its annual revenue.Net Debt to GDP measures the governments fiscal capacity. They relate bond indebtedness to the sources of govern ment revenue (McKinney, 2004, p.245). Ontarios net debt is hovering around a quarter of its GDP and between 2002 and 2007 where it has been slowly declining from 0.27 in 2002 to 0.24 in 2007. (Please refer to appendix 1.3) Since a consistent downward trend exists in this measure, this means that the government is improving in this ratio. Since both Net debt and GDP has increased from 2002 to 2007, this means that the GDP has increased at a faster rate than the increase in net debt. This means that governments ability to pay its debt obligations has improve over five years.Deficit to GDP measures the governments deficit in relation to its GDP. In this measure, the government has seen improvements from 2003/2004 to 2006/2007. This means that the Ontario government is continuously managing its expenditure and making sure it spending is within its capacity. Even though the Ontario government has seen deficits in the years 2003/2004 and 2004/2005, this ratio is looking favourable since deficits are declining in relation to GDP, which has seen a continual increase over five years. (Please refer to appendix 1.3)FlexibilityPublic Debt Charges to Revenue measures the governments ability to raise funds to pay its debt servicing charges. In this measure, the Ontario government has seen a constant improvement or a downward trend during the five year term from 14.9% in 2002/2003 to 9.7% in 2006/2007. The reason for this is because Ontarios revenues over the same five years have seen consistent growth and have increased by approximately 31.8% while interest on debt has seen a 13.7% decline over the same period. (Please refer to appendix 1.3)Net Book Value to Cost of Capital Assets measures the true value of the governments capital assets. This value is hovering around two thirds of the cost of capital assets and it has seen a slight downward trend from 69.5% in 2002/2003 down to 67.2% in 2006/2007. (Please refer to appendix 1.3) This figure is a good indication of the governments capital assets such as add, buildings, and transportation infrastructure such as highways, railroads and bridges. However, looking at the Ontario governments public accounts, it does not state whether or not the value of land is recorded at historical cost or fair market value. If the land is recorded as historical cost, then it does not really show the true value of the governments assets instead it is under estimated if the value of the land increases in market value and vice versa if it decreases in market value. Furthermore, depreciation is measured based on estimates it could be that the life span of an asset could be higher than expected and therefore, while the asset is recorded on financial statements as having no value, the asset could still be utilized. Furthermore, an asset can be estimated to have a lifespan of 10 years at year 10, even though the asset can still be used, an organization can continue using the asset or request for new funding for the replace ment of the asset. Since the asset can still be utilized, the organization can sell the asset and make money out of it (scrap value) and record it under its miscellaneous revenues. This becomes an issue of working(a) efficiency versus manipulation of assets to maximize revenues.VulnerabilityGovernment Transfers to Total Revenue measures the proportion of the federal governments share of the province of Ontarios total revenue. Federal funding that flowed into the provincial government ranges between 13% (2002/2003), which is its lowest level between 2002 and 2007, and has increased steadily to approximately 15.8% (2005/2006) and dropped slightly to 15.5% in 2006/2007. (Please refer to appendix 1.3) This figure can be interpreted in various ways where the upward trend shows that the federal government is continually increasing its transfer payments to the province of Ontario in relation to its total revenue. Looking at nominal figures, the federal government has increased its transf er every year between 2002 and 2007 (from 8 billion dollars in 2002/2003 to 14 billion dollars in 2006/2007. (Please refer to appendix 1.2) Part of this increase is due to huge surpluses the federal government has been reporting in recent years. However, the increased in federal transfer can be seen both negatively and demonstrablely. This can be viewed positively because the province is able to provide more services to the public. However, funding commitments can be revoked especially with a change in government and government priorities. Furthermore, budgetary models are built upon expectations, if the province expects to receive a certain amount of dollars from the federal government, and this is not realized, then it can potentially adversely affect the financial standing of the province. The provincial government should also use this figure as a sign of caution in terms of its forecasts not to rely heavily on federal transfers. The province should try to provide the same level of programs and services to its citizens without relying heavily on federal transfer payments because of fluctuations and uncertainty.However, others may argue that increasing federal transfers is a positive step towards addressing the so-called fiscal imbalance and providing Ontario a fair share of federal funding that is more proportional to the contributions that Ontarians make to the federal tax base. This demonstrates another useful limitation/ caveat performance ratios/indicators are not purely objective, in that their interpretation and ultimately the manner in which they are used/applied depend on the subjective point of view of the public sector analyst/manager.Net Foreign Currency Debt to Total Debt measures the provinces debt level to foreign countries and or organizations. This figure has seen an increase from 21.4% in 2002/2003 and 23% in 2004/2005 and from that point it declined to approximately 20% by 2006/2007. (Please refer to appendix 1.3) This measure is a good indicator on Ontarios reliance on foreign governments in terms of trade and its indebtedness. A declining net foreign currency debt to total debt means that the province can have a positive effect on the provinces quotation rating that assesses the governments vulnerability and stability which can have an impact on interest rates on its debt. An improving credit rating will increase the chances of the Ontario government to refinance its maturing debt because of lower risk of default from its debt. An increase in this ratio might cause international solicitude where other countries can call the province on its debt that can have adverse effects on the economy in terms of attracting investors and other countries instinctive to do business with the province. As a useful summary of the provinces dependence on foreign debt, it is important to keep track of this budget measure of vulnerability. reciprocation of the Ontario governments Financial Analysis as a Measure of PerformanceBased on the above discussion the ratios used by the government of Ontario is a useful tool as part of a comprehensive strategy or approach to analyzing, measuring the provinces economic and financial performance. However, these tools alone are clearly not sufficient to obtain a full and clear picture and forecast of the economy. Variables such as domestic and international political conditions, international and domestic good prices, supply and demand, price of oil, interest parity, price parity, and other non-financial indicators, such as demographic trends, should be considered when formulating, implementing, and assessing the effectiveness of policies and programs.Furthermore, these budgetary performance measures tend to be applied at a relatively high level (i.e. on rolled-up or summed-up figures or estimates) with a view to gauging whole of government performance. Since the Ontario government comprises of individual ministries and departments, improving whole of government performa nce must start with the individual ministries and their specific programs and projects. This reinforces the idea that full and effective performance measurement entails consideration of other and more specific factors/elements. The government of Ontarios financial measures provide very useful snapshots of the government position at a particular point in time. However, there are other measures, information and factors that one has to consider in gauging the performance of the government and formulating recommendations and strategies moving forward.ConclusionIncreased pressures and complexities confronting the public sector has encouraged the proliferation of private sector practices, including the use of performance measurement to gauge program outcomes and ensure transparency, accountability, and sustainability of government operations. As this paper has demonstrated, there are benefits to performance measurement, such as providing opportunities to track, compile, and maintain data and requiring regular reporting, thereby helping in promoting transparency and benchmarking. However, these financial/material indicators are not sufficient to ensure effective and efficient management of public resources. As this paper has pointed out, there are several limitations and caveats to performance measurement that public sector managers/analysts must bear in mind, including the need to incorporate other information (e.g. non-financial and qualitative data) in developing, implementing, and assessing policies and programs. These points were reinforced in this paper through an examination and evaluation of financial ratios intended to measure the performance of Ontarios budget between the period of 2002 and 2007. While this paper presented a case study of performance measurement from a financial perspective, perhaps a more arouse and richer case study would be to explore quantifying qualitative program performance measures in which represents another area of future researc h. Indeed, performance measurement when used in a public organization by itself is a fools gold (Carroll and Dewar, 2002).

Sin Tax Bills Pros And Cons Economics Essay

blurt out Tax metres Pros And Cons Economics EssayWith tobaccos and cig atomic number 18ttes being the major ca trust of lung enkindlecer death s in the Philippines, advocates are thrust to pass the Sin Tax Bill. Sin levy putz is the valuate levied on any products that are nonorious to be harmful like cigarettes, intoxicant and even activities like gambling. In connection to this, it is say to be effective in reducing behaviour of u repulsivenessg such. This thesis paper aims to show the pros and cons of the Sin Tax Bill reforms to the Philippine economy, presented before the Senate and the House. There were three specific perdition appraise reforms discussed, the Abaya Bill, Recto Bill, and the Santiago Bill. This study accentuates that the approval of the said load has its capital advantages that will help the countrys economy, to a non bad(p)er extent thanover its possible disadvantages must not be neglected. Moreover, the ideas written here are not against the bill, hardly in that respectfore require get ahead analysis and revisions that are deemed helpful to the Philippine Economy.DiscussionIntroductionAccording to the human race Health Organization in 2009, tobacco is responsible for 12% of anthropoid and 6% of fe anthropoid deaths worldwide. The Acting Chief of NCI tobacco Control Research Brach Chief, Michele Bloch, MD, PhD said that over altogether around the globe, there are 41% of men that potbelly and and 9% for women also it is estimated that the total number of tobacco-re new-fangledd deaths will rise from 6 million today to 8million in 2030 (Fromer, 2011). Every day, a person dies from lung cancer in the Philippines. Tobacco or cigarette is the only legal consumer product that overcomes half of its users when used as directed by the manu facturer. And not only cigarettes, but as well as other socially proscribed goods such as alcoholic beverages, drugs and even soft drinks (in other areas), are considered to be undesir able or harmful, and thus were levied with extravagantlyer(prenominal) levyes compared to the original by the authorities in laymans term The Sin Tax.Sin levy in new economic terms, are externality taxes, taxes designed to reduce behaviour which is known to be harmful to society (Gifford, 1997. p.1). It is an excise tax on which its objectives is to make consumers lose pertain in buying such by imposing taxes on goods that are known to be harmful and lethal such as cigarettes and liquor or activities like gambling (Philippine Daily Inquirer, 2012).Before, a Tiered Specific Tax system based on suggested retail equipment casualty (srp) was put in place. Until the late Pres. Corazon Aquinos administration in 1986, reforms the tax system by changing the specific or unit-based tax to an Ad valorem Scheme, from where the price is based on the manufacturers, for cigarettes. From then on, sin tax bill was revised many times until the year 2004, where the Congress passed Republic Ac t No. 9334 an act increasing the tax collection but this is widely considered to be ineffective and a watered-down law. On its implementation in January 2005, below this law, all brands of cigarettes and alcohol products are mandated to an add-on in the excise tax rate every two years, up until the year 2011, where there will be specified varying rates of increases (Philippine Daily Inquirer, 2012).The matter on the return of the new sin tax bills proposed by dissimilar officials, mainly those of Abaya, Recto and Santiago, has caught many people in between two arguments. The Department of Finance wants the sin tax bill to raise P60 billion to fund the governments universal wellnesscare program, especially for the care of public hospital patients with lung diseases. The bills obvious benefit on its approval is to a greater extent health-related, but there are still quite a number of critics against the approval of the said bill. Why? Because there are multiple minds as to wheref ore the sin tax bill reform must not be approved and therefore must be a subject for further and much improved revisions.Different types of Sin Tax Bills proposedA data from the American Cancer Society and public Lung Foundation says, Despite the existence of laws that limit smoking, male Filipino smokers are among the top smokers in the world occupying the ninth spot following India and china among others (Manongdo, 1). In accordance to this, many government officials started passing reforms of different kinds that are to change the current sin tax bill implemented.Firstly, the approved Abaya Bill House Bill 5727, or the Act Restructuring the Excise Tax on Alcohol and Tobacco Products states that there will be equal taxes rates to be charged to any cigarette brands. With this, there will be arguing between cigarette companies. Cavite Rep. Joseph Emilio Abaya agreed to amend the sin tax on tobacco products from unitary tax system to two tiers. Under substitute bill, there will b e two tiers or groups for cigarettes while distilled and fermented liquor will have 3. Tier 1 Cigarette packs priced lower than 11.50php below are meted with a P12 tax on the first year and P24 on the next year while on Tier 2 Cigarette packs priced 11.50php above are meted with P28.30 on the first year, and P30 on the blink of an eye year. Indexation or increase will be 8% for every two years, until the year 2025. It has been over 15 years since a sin tax bill made it out of committee meetings in Congress. A landslide vote happened in June, where 210 lawmakers voted to pass the amended House Bill 5727, by Cavite Rep. Abaya. But the bill was watered down, since the bill aims to reduce consumption of tobacco and alcohol, especially among the poor, while raising additional revenues, which will be channeled to the governments health care program (Balea, 2012). According to Finance Assistance Secretary Teresa Habitan, amended version will only translate to P33 billion from the original plan of P60billion revenue. secondly is the Recto Bill by Sen. Ralph Recto. For cigars, the current 2-tiered NRP-based structure shall be retained, but starting frame 1, 2013, there shall be an increase to the ad valorem rates by more than 100 percent. Pursuant to Cathy Yamsuans report in the Philippine Daily Inquirer 2012, there will be an increase of 121 percent to hand-packed cigarettes taxes from P2.72 to P6 per pack beginning March 1, 2013, particularly in low-priced cigarettes. While mid-priced cigarettes, a 32% rise from P7.56 to a P10 tax and high-priced cigarettes, a 17% increase from P12 to P14 tax per pack. Recto, however, presented a committee report that would raise only between P15 billion and P20 billion in additional sin taxes.Lastly is Sen. Miriam Santiagos proposed reform.Santiago said that under her bill, 85 percent of the P60 billion would be used for the government health program while the remaining 15 percent for safety nets that would ensure that tobacco far mers can shift to more lucrative crops like vegetables that have a larger market than tobacco (Yamsuan, 2012, 12).No more further discussions needed to Santiagos Bill because Juan pimp Enrile, the current Philippine Senate President, noted that the Santiago bill is almost similar to the governments original position.Sen. Miriam Defensor-Santiagos version of the Sin Tax Bill or the Senate Bill 3249 espouses a single tier excise tax scheme for cigarettes. The version reported out by Rectos Ways and Means Committee pushes a multi-tier scheme, while the House-approved bill is a two-tier system.AdvantagesThere are a down to mention when we look in-depth to the possible benefits, the country whitethorn be subjected to, that will be a great help to the society. Here, there are three main points that are most likely to be emphasized. First are the sin tax bills health-related purposes and benefits. Since the real reason behind the implementation of this law is to disapprove the people, especially the youth to smoke cigarettes and indulge themselves to other vices, Department of Health (DOH) said that sin tax bill is a health bill. If this is approved, many Filipino lives will be saved if this law is effective enough after its implementation. As stated by The case Youth Commission (NYC), the number of young smokers in the country had change magnitude. Two of five Filipinos aged 13 to 15 years old consumed tobacco endure year. The increase in cigarette prices may thus limit the number of young smokers (Garcia, 2012, 15). On the other hand when the Laylo Research Strategies made a crown survey on how will Filipino smokers react if there is an increase in sin taxes, the survey results confirms what the advocates have been saying higher tobacco taxes would come across discourage consumption and therefore reduce the number of Filipinos who either develop diseases or die from smoking. The Southeast Asia Initiative on Tobacco Tax says higher sin taxes can help save 1 40,000 to 1.3 million Filipinos. With the pending Sin Tax bill likely to affect cigarette prices, 31% of the regular smokers said they will slowly stop smoking, while 17% will stop immediately (Rappler. 2012 24).In a study on Tobacco and Poverty of the World Health Organization (WHO) in 2008, the annual government revenues of P23 Billion from tobacco taxes is not enough compared to the conservatively estimated P149 Billion annual economic losses collect to expenses for productivity and health care costs of the top four tobacco related diseases Cancer, Chronic Obstructive Pulmonary Disease, and stroke. (Manongdo, 2012). According to reports furnished, the m maveny the government spends on tobacco-related healthcare issues is more than the revenue it gets from the taxes collected from tobacco and alcohol products. This means that the government is spending more to cure diseases chronic pulmonary diseases, heart disease, cancer, liver diseases etc. that are caused by the consumptio n of tobacco and alcohol (Garcia, 2012 9).Secondly, with higher sin tax rates means higher government revenues. Lets say theres no existence of the sin tax bill, which means, 0% tax increase. With no tax, the government will only garner 25.4B php annually. But in consideration of the Rectos Bill, with 65% tax increase, there will 37.8B php revenue. While in Santiagos Bill, with 265% tax increase, there will be no little than 68.7B php revenue, which is by the way more than enough for the governments object of 60B php. According to Dr. Antonio Dans, professor at the UP-College of Medicine, with the approval of 265% proposed tax increase by Santiago chances are, smoking rates will go down to 26% from 31%.. That drop from 31% to 26% represents more than two million people stopping smoking. If you stop smoking, you will avoid death from 49 diseases that can kill you from smoking like lung cancer, coronary diseases, stroke, heart attack, chronic pulmonary diseases (Antonio, 2012, ).Las tly, international smuggling of cigarettes will be lessened. According to Sen. Pia Cayetano, the Philippines has the second cheapest retail price in Asia (in terms of cigarettes). Even among the cheapest in the world, primarily because of relatively low tobacco taxes. Many other countries levied heavy amount of tax on cigarettes as part of their public health policy. Dr. Aida Yurekli, coordinator of the WHOs Tobacco-Free Initiative, says the nations low taxes on tobacco drive the foreign demand for illegal imports of cigarette from the Philippines.He once thought the China is the main source of inglorious cigarettes, but he found out that there was a big number coming from the Philippines. Since tobacco companies are paying (low) taxes, they tend to overproduce. And an excess of 2 billion packs from the 5.4 billion packs to be produced this year, from which only 3.5 billion packs will be consumed, makes it suspicious (Merueas, 2012).With the effectiveness of tax increase, Philippi ne cigarettes would not be any cheaper than before, and thus will discourage international smuggling, since tobacco companies will pay more taxes, and no longer will have cortege for overproduction that may end up as smuggled goods to other countries.DisadvantagesThough many people, if asked, are pro-sin tax bill, due to its undeniable benefits, lawmakers, still, remain shared over the sin tax bill. Debaters tend to overlook the possible drawback, the sin tax bill, may offer to the countrys economy.Tobacco farmers are the most affected in the approval of the any bills mentioned above. La Union Rep. Victor Francisco Ortega said that many tobacco farmers were able to send their children due to their jobs in the tobacco industry. It has done more good, than evil, he said in an interview hosted by respected broadcast journalist Rappler editor-at-large Cheche Lazaro (Bisyo A special report on Sin Tax, 2012).In the interview, Bayan Muna Rep. Neri Colmenares said,The government has not provided a comprehensive program for the support services, subsidy and assistance to tobacco farmers. Tobacco farmers will not benefit from the increase of retail prices of cigarettes increase due to sin tax. Therefore, the higher sin taxes will definitely negatively affect the tobacco industry, which will result into unemployment to huge industries like Fortune Tobacco and the likes. (Bisyo A special report on Sin Tax, 2012)In one of the three stated bills proposed above, specifically the Abaya Bill, inequity in pricing the goods may occur. If all brands will be taxed similarly, small scale companies are at a big loss and at the worst scenario, may stop production. Abaya suggested that equality in taxes will create competition between large scale companies and local tobacco companies but the latter will be burdened more since bigger companies are far more able in paying the demand tax levied to their products. With high taxes means less production, which will end up to less profi t by the company, and later on bankruptcy. On a debate, Sen. Ralph Recto said that if they tax too much, it may kill industries, and even the cigarette industry may be burdened too much already. Revenues may be lessened due to insufficient companies producing cigarettes, from where taxes are supposedly to be collected from.Too high taxes may result in less revenue. How? One of the debaters in the senate, Mr. Manos Koukourakis said, When you apply so high tax increases, people will find alternative ship canal to smoke (Bisyo A special report on Sin Tax, 2012). Consumption did not diminish on the contrary, it has increased. At first, sin taxes will give increased revenues for the government, but in no time, it will fall drastically. Why? Because of smuggling. Taxing cigarettes and other sin products will not make people quit intousing it. Its already an addiction and this simple means of increasing retail price is not the answer. Recto said in one of his reports, the solution is not to severely tax the sin products but to ban them completely.When the price of any product rises excessively, smugglers bring in cheaper products. So instead of discouraging consumption, the very high prices actually encourage it because the smuggled products are very cheap (Cruz, 2012, 4).A House leader from the Philippine delegation warned that if ever the government would not take a second look to these proposed sin tax bills, the signing of the free trade agreement (FTA) with EU or the European Union, may be put in jeopardy. The EU expressed their continuous objection to the sin tax bill. EU Trade Commissioner Karel De Gucht told the lawmakers that the approved House version and proposed Senate version will not pass the World Trade Organization (WTO) compliance because of unfair taxation (Luci, 2012). British American Tobacco (BAT) Philippines general manager James Michael Lafferty said, The current tax system has worked against the adit of new brands into the market(Galang, 201 2, 46).ConclusionSen. Miriam Defensor Santiago, one of the most vocal sin tax bill advocates said, When cigarettes and liquor are cheap, more people will use them- and so this has been the advocates standing point. The sin tax bill had been a controversial debate to the lawmakers. It made Sen. Ralph Recto, the chairman of the Senate committee, resign after numerous opposition from the Senate he had Sen. Franklin Drilon take over his place after resignation. They even called his proposed bill a watered-down bill or ineffective.In the approval of the Sin tax bill, relations with the European Union may be affected. If ever the Philippines free trade with EU will be cut-off, our economy will lose a lot. And not only that, since Lucio Tan, a renowned business tycoon, is the owner of the biggest tobacco company in the country, the Fortune Cigarette, increasing of taxes to the sin products might be reflected to other major companies under him as well, like those of Philippine Airlines and the likes. All these factors will not increase the governments revenues, and on the other end might be the opposite. Therefore the sin tax bill has defeated its main purpose of raising revenues.Also, the argument of the pro-sin tax bill that higher taxes would discourage smokers is a mere assumption. They have not presented make pass provisions and relied on surveys, which is not at all very reliable.Then again, according to Benjamin Diokno, professor of Economics at the School of Economics, UP Diliman and causation secretary of budget and management undersecretary for budget operations in the Aquino 1 administration, talking about the threat of smuggling, it is real, and ignoring it would be a monumental mistake. The country has been face up a lot of smuggling cases in other products like rice, oil products, and other consumer goods continuously. And the possible addition of cigarettes to be smuggled would be a lot of work for the Bureau of Internal Revenue, which he considers w eak (Diokno, 2012).But behind the drawbacks mentioned, there are a lot of other alternatives, other than taxing, that may discourage and lessen the use tobaccos and cigarettes. One suggestion is the proposal of former Health Secretary Esperanza Cabral to put graphic photographs of smokers with lung or mouth cancer on the packs of cigarettes, and they cerebrate it should scare some of them into stopping smoking. Though most of the tobacco industries are against it, the Philippine Senate and Congress are also in debate about it. other suggestion is the prohibition of smoking in the public, from which the Senate lose the case against tobacco companies.In the question of what would be the most effective among the proposed bills. The countries Vietnam, Cambodia and Laos currently part of this worlds uphill economies use ad valorem rates in taxing their products like tobacco and alcohol. These countries must have adopted ad valorem taxation, after learning the best practice from their foreign tax consultants. The Philippines is the only country in the region that uses specific rates(Diokno, 2012, 7).On the contrary, eeconomist and former Economic Planning Secretary Solita Collas-Monsod at a forum on Tuesday, September 18, 2012 said that the tobacco industry players are disseminating about the possible aftermaths of the proposed sin tax measure on the Philippine economy, from which she considered as all lies. She opposed all the issues discussed and declared that these are just false claims (cited from Fonbuena, 2012).But experts urge the Senate to use the proposed bill of Sen. Miriam Santiago. This, Santiago said, would help avoid the 240 deaths day-after-day among Filipino smokers with P200-billion health costs to government. It hews much more to the actual realities and the actual principles that we want. If everybody is in favor of a sin tax bill, lets start with that sin tax bill, economics professor Solita Monsod commented to Santiagos version of the bill, from where tobacco and alcohol products projected tax revenues will be around P60 billion (cited from Chua, 2012, 3).The author is not against the approval of this bill, but thus, is in favor of the amendment and better revisions of the sin tax bill. People must look not only to the possible advantage it may bring, but one should always be aware of the possible drawback it will take along its process. The benefits, the sin tax bill, will bring the Philippines is undeniable. Health-related and even revenues is a given. But the fact it has taken a long course of almost 16 years of amendment, has a reason. There are multiple reasons as to why the sin tax bill reform must not be approved and therefore must be a subject for further and more improved revisions and this reasons must not be neglected.