A tax on oil companies
It was surprising to see The Economist repeat, uncritically, claims made by green activists and a trade union with an industrial axe to grind, that a “gas-extraction tax is bringing in less revenue than expected” (“Poor credit”, November 26th). The tax in question, the petroleum resource rent tax, is just one of many taxes paid by the oil and gas industry. For almost 30 years, Australia has used the PRRT as a super-profits tax. It encourages investment by only taxing projects when upfront costs have been recovered and profits exceed a modest benchmark rate. However, when these conditions are met, the PRRT, in conjunction with the company tax, applies an effective tax rate of 58 cents on every dollar of profit. When projects are not profitable, usually because prices are depressed or upfront costs have not been recovered, Australia still applies a 30% company tax to revenue.
As indicated in your article, the profits-based PRRT has encouraged $200bn through investment which will deliver far more revenue, over the investment cycle, than would be likely to occur with a crude royalty.
MALCOLM ROBERTS
Chief executive
Australian Petroleum Production and Exploration Association
Canberra, Australia
Immigrants in Hong Kong
Your briefing on China’s view of ethnicity and nationhood painted a generally accurate picture of China’s Han-centred order (“The upper Han”, November 19th). That has been the case for thousands of years, mainly because the Han people are by far the majority and Han culture has proved to be resilient despite many challenges. But in decrying the low numbers of immigrants naturalised in China compared with other countries, you overlooked the important role that Hong Kong, under “One Country, Two Systems”, contributes to China’s ethnic diversity.
In accordance with a rule adopted by the National People’s Congress Standing Committee in May 1996, Hong Kong’s Immigration Department is authorised to handle all nationality applications in accordance with China’s nationality law on behalf of the central government. From July 1997 to the end of December 2010, the Immigration Department approved 10,975 nationality applications from a wide diversity of potential entrants from different ethnic and national backgrounds. The number of nationality applications approved in Hong Kong continues to rise.
This is another good example of how Hong Kong contributes to the diversity and modernisation of China.
REGINA IP
Member of Hong Kong’s Legislative Council
Ropey rupee recall
* You provided a balanced analysis of the decision by India to withdraw 86% of banknotes from circulation (“Short-changed”, November 26th). The government has failed properly to inform people what these changes mean and many of the poor who live in isolated areas away from the city are being heavily affected by this policy.
Newspapers in India report that many poor Indians are afraid to go banks or cash dispensers because they think they will be asked to hand over all their savings. Money, whether illicit black money or not, has become unusable for these people.
GUILLERMO GARCÍA MONTENEGRO
Gambier, Ohio
Why Trump should go green
As you pointed out, many of the incentives to invest in low-carbon technologies in America are at the state or business level (“The burning question”, November 26th). Earlier this year, governors from 17 states, both Republicans and Democrats, agreed to co-operate on rolling out and cutting the cost of clean energy and transport technologies. Indeed, many renewable-energy federal incentives are backed by many Republicans. The solar- and wind-tax credits were recently renewed for five years by a Republican-led Congress. This isn’t just because renewables are fast coming down in cost, they have also become important industries in Republican strongholds such as North Carolina, which invested $7bn in the technology in 2015, and Texas, where over 100,000 people are employed in the renewables industry.
As the cost of green technologies continues to come down, the size of the American clean-energy industry continues to grow and the export market for low-carbon goods and services becomes increasingly significant. “Making America great again” may require Team Trump to think twice before turning its back on the climate agenda.
NICK MOLHO
Executive director
Aldersgate Group
London
Bold thinking on refugees
Europe’s populists are obsessed with migration (Charlemagne, November 26th). But it is the UN convention on refugees that underpins Europe’s crisis. It was drafted in the aftermath of the second world war and is outdated. It should be scrapped and replaced with something better. No single country would risk being ostracised by abandoning the convention on its own, but the EU as a whole has the diplomatic and moral heft to succeed. Apart from taking back the initiative from the populists it would also be in the interest of refugees. Instead of granting asylum to anyone who reaches its shores, Europe could focus on those most in need of protection but lacking the means to make the journey.
If one really wants to rub it in the face of Marine Le Pen et al, there should be a Europewide referendum on the issue.
ANDERS LONNFALT
Olofstrom, Sweden
Trees a crowd
The chart in “For peat’s sake”, (November 26th) suggests that tree-cover loss is the same as deforestation. It is not. Trees grow back when sustainably harvested or after forest fires. The tree-cover loss is only temporary. The chart indicates that Canada lost 7.3% of its tree cover between 2000 and 2014. But sites that were harvested and replanted in 2000 are now covered in trees that are four metres or taller. The Canadian Forest Service reports that the deforestation rate in Canada is 0.02% a year, or less than 0.3% between 2000 and 2014.
PHILIP GREEN
Chief executive
First Resource Management Group
New Liskeard, Canada
Science trek
The paradox in Roger Shawyer’s EMDrive is easily explained (“Ye cannae break the laws of physics”, November 26th). There would be an axial component of radiation pressure on the conical walls of the chamber, not just on the flat ends. This invention is a benign piece of whimsy.
More worryingly in my own field, energy conservation, flawed science is routinely used to peddle bogus products. Vendors claim that combustion can be improved by passing fuel through magnetic fields, that refrigeration circuits can be made more efficient by injecting heat and that multiple layers of reflective foil enhance the effect of insulation quilt, to name but three spurious technologies.
Sadly, as well as post-truth politics, we are entering an era of post-science engineering.
VILNIS VESMA
Director
Vesma.com
Newent, Gloucestershire
Classifying economists
You asked, what is the most appropriate collective noun for a group of economists (Free exchange, November 26th)? At least for those of us doughtily ploughing the rough terrain of macroeconomics, the answer is clear: an aggregate.
PROFESSOR MICHAEL BEN-GAD
Department of Economics
City, University of London
* Letters appear online only
