Australian Politics Forum - Why a price on Carbon?

Original Reeper

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Why a price on Carbon?
May 23^rd, 2011 at 8:43pm

Annual Global Carbon Emissions = 29,321M tonnes in 2011

Global forecast annual increase@2% = 586.4M tonnes for 2012

Net effect of an Australian carbon tax = ??? no ones bothered to work it out, but let's be very generous and say a once off drop of 5% = 21.85M tonnes.

Net Result: Global increase of 564.6M tonnes year one.

So what exactly is an Australian carbon tax meant to achieve in terms of global emissions ? Have I missed something? Or is it just a revenue raiser?

Somebody please help me, the pollies and the press are still having too much fun playing with the skeptics to do any real work.

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perceptions_now

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Re: Why a price on Carbon?
Reply #1 - May 23^rd, 2011 at 9:52pm

Original Reeper wrote on May 23^rd, 2011 at 8:43pm:

Annual Global Carbon Emissions = 29,321M tonnes in 2011

Global forecast annual increase@2% = 586.4M tonnes for 2012

Net effect of an Australian carbon tax = ??? no ones bothered to work it out, but let's be very generous and say a once off drop of 5% = 21.85M tonnes.

Net Result: Global increase of 564.6M tonnes year one.

So what exactly is an Australian carbon tax meant to achieve in terms of global emissions ? Have I missed something? Or is it just a revenue raiser?

Somebody please help me, the pollies and the press are still having too much fun playing with the skeptics to do any real work.

In essence, YES, as is the Liberal plan, then throw in an ETS to help the private sector reap some further profits!

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BatteriesNotIncluded

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Re: Why a price on Carbon?
Reply #2 - May 26^th, 2011 at 4:46am

Original Reeper wrote on May 23^rd, 2011 at 8:43pm:

Annual Global Carbon Emissions = 29,321M tonnes in 2011

Global forecast annual increase@2% = 586.4M tonnes for 2012

Net effect of an Australian carbon tax = ??? no ones bothered to work it out, but let's be very generous and say a once off drop of 5% = 21.85M tonnes.

Net Result: Global increase of 564.6M tonnes year one.

So what exactly is an Australian carbon tax meant to achieve in terms of global emissions ? Have I missed something? Or is it just a revenue raiser?

Somebody please help me, the pollies and the press are still having too much fun playing with the skeptics to do any real work.

MARKET FAILURE IS ECONOMICS 101!

THE FORUM DOES NOT DISPUTE THIS AS FACT!! Shocked

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*Sure....they're anti competitive as any subsidised job is. It wouldn't be there without the tax payer. Very damned difficult for a brainwashed collectivist to understand that I know.... (swaggy) *

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Original Reeper

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Re: Why a price on Carbon?
Reply #3 - May 29^th, 2011 at 10:56am

OK, so:

Why is the Govt purporting a carbon price will benefit the environment? Why is the opposition not challenging this assertion directly?

Has anyone actually examined what the potential drop in carbon emissions would be based on different levels of tax?

Are households realistically able to reduce carbon emitting power useage to mitigate the increased price of power? If so, how much useage behaviour can be changed before resorting to a tax?

What will be the inflationary effect of business passing increased costs onto consumers?

Will it result in decreased consumption overall and slow the economy?

Will the fact Imports are not as heavily effected simply lead to an increase in imports?

Why is the Opposition not arguing a case that highlights this fundamental flaw?

Why has the press not examined the economic fail?

Disclaimer: I have no political barrow to push here, Im simply at a loss as to how this debate has remained off the track of logic for so long. I accept the climate is changing, I just don't see that there has been any consideration of the potential effects of a carbon price on either the environment as a whole or the economy as a whole by ANY group.

I'd love to reduce pollution but who knows what effects a carbon price will have - positive and negative?

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« Last Edit: May 29^th, 2011 at 11:08am by Original Reeper »

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BatteriesNotIncluded Gold Member Offline MediocrityNET: because people died for this! Posts: 26966	Re: Why a price on Carbon? Reply #4 - May 30^th, 2011 at 4:29am Markets are regulated: there isn't a free market in the world... free-markets only exist in your head: it's called an idea! A carbon tax is only the beginning!!!! You have no idea what Ronald Reagan said do you mate?????
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BatteriesNotIncluded

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Re: Why a price on Carbon?
Reply #5 - May 30^th, 2011 at 4:40am

Are households realistically able to reduce carbon emitting power useage to mitigate the increased price of power? If so, how much useage behaviour can be changed before resorting to a tax?

<<

Ever heard of the laws of supply and demand?

Some of your questions are legitimate of course but most are simply best left for another slave to waste his time doing your homework.... Cheesy

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*Sure....they're anti competitive as any subsidised job is. It wouldn't be there without the tax payer. Very damned difficult for a brainwashed collectivist to understand that I know.... (swaggy) *

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Original Reeper

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Re: Why a price on Carbon?
Reply #6 - May 30^th, 2011 at 10:50am

Quote:

Ever heard of the laws of supply and demand?

Oh, an economist. I know, I should frame my questions in an appropriate manner if I expect people to provide intelligent responses.

Ok;

I guess I'm referring to the degree of imperfect elasticity of household demand, and industry demand, for power - has anyone determined how in/elastic they actually are?

I also must be referring to something called the "multiplier effect" - given the above elasticity, what will the overall effect (ie not just energy) of the tax be on consumption? I think this might have something to do with the"knock-on effect"?

PS: Love the smilies! They add so much to the tone of the discussion and my 8 yo niece adores them.

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BatteriesNotIncluded Gold Member Offline MediocrityNET: because people died for this! Posts: 26966	Re: Why a price on Carbon? Reply #7 - May 30^th, 2011 at 12:00pm There's no point getting technical if you aint prepared to examine the basics!
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Original Reeper

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Re: Why a price on Carbon?
Reply #8 - May 30^th, 2011 at 2:19pm

Looking for informed discussion here. Adult responses welcome.

We need to understand what the benefits of carbon price are before implementing a tax. There has been no explanation of the purported benefits so far - beyond the generic "it'll help the environment!" no-one can provide us with an explanation as to how it will actually achieve anything.

Vital questions remain unanswered, such as:

How high will the price of power have to rise before people start to use less?

How much will people cut back on expenses in other areas to compensate rather than reducing power use (especially considering we are post-billed for the stuff)?

When we say less, how much is a realistic reduction target - 1%? 10%? How much energy inefficient stuff will we need to replace to achieve that goal?

What will the net effects be on global carbon production?

Does the expense to Australians justify these results?

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Original Reeper

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Re: Why a price on Carbon?
Reply #9 - May 31^st, 2011 at 9:16pm

OK, I found a study by NATSEM that asserts aggregate price elasticity demand for power is -0.3

IE for every 1% rise in price there is a -0.3% move in electricity consumption.

Garnaut has recommended $26 / tonne.

The average Aussie houshold emits roughly 5 tonnes per annum and pays on average $2K per year for the privilege.

5 tonnes x $26 = $130 increase in power bills (assuming the power companies pass the consts on equitably)

$130 x 30% elasticity = $39 (ie we will use $39 less power, and reduce spending on other items by the remaining $91)

$39 = 1.95% of $2000 - in other words, we will be likely to reduce electricity use by 1.95%

443Mtonnes carbon (our annual output) x 1.95% = 8.619Mtonnes reduction in carbon emissions.

Consider: China will increase emissions by a low end estimate of 2.8% or 183MTonnes over the next 12 months. Our 8.619MTonne reduction will be eaten up by this growth in 17 days - just over a fortnight.

Meanwhile, 70% of the $11.5Billion carbon tax ($8.05Billion, or 1% of GDP) will be sucked out of other areas of the Aussie economy. (actually it will be more than this once the multiplier effect is taken into account, but its too early to publish estimates of that figure).

In light of the above, my questions are:

Will the planet benefit from this carbon tax?
Will the Australian public benefit from this carbon tax?
Will the Australian economy benefit from this carbon tax?
Will it be easier to create an ETS with a tax in place?
Who will benefit from an ETS?

Why a price on Carbon?

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« Last Edit: May 31^st, 2011 at 10:10pm by Original Reeper »

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Doctor Jolly

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Re: Why a price on Carbon?
Reply #10 - Jun 1^st, 2011 at 9:45am

A typical criticism of Australia doing anything about global warming is that we are only contributing a very small amount of co2 compared to the rest of the world.

That is a flawed view for many reasons.

1) The definition of "we". Australia is a small population. Collectively we do everything in a small way. If you want to make yourself feel smug about not doing anything, why limit yourself at Australia. Why not say "the people of my street" only produce 0.0001% of polution so why should we do anything.
You see, political crutch based on geographic boundaries. Break the world up into 25m people zones, and we would be the worst of the worst.

2) Australia is one of the worst poluters per capita in the world, and the fastest growning polution/ person. We are about 9th worst now, and tracking to be the worst within a couple of years. Only the oil states with abundant fossil fuels are ahead of us.

3) Its not a fact that we should lead the world in co2 mitigation, its a fact that we need to catch up to the rest of the world. Countries without a carbon price have implemented other stategies which see a far greater % of renewable generated electricity than us. We are way behind, and falling further back.

4) Electric cars are going to be the future of cars, but if we keep coal fired power stations, they will actually make our emissions worse.

5) We have abundant renewable resources, and plenty of space to develop them. The opportunities are massive.

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Original Reeper

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Re: Why a price on Carbon?
Reply #11 - Jun 1^st, 2011 at 10:38am

Thank you Doc, agreed, per capita we have a lot to answer for.

However, the environment works on absolute values, not by pro-rata-ing over man made borders.

We can certainly clean up our act. Regardless, a carbon tax is not the appropriate way because the costs outweighs the benefits.

I'm concerned about the disingenuous message that a carbon price will "do something to help the environment". This will hamper us from pursuing initiatives that stand to be more effective. Worse, when it dawns on people this is the case they will become disenchanted with the environmental lobby and ignore further efforts to improve

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« Last Edit: Jun 1^st, 2011 at 1:02pm by Original Reeper »

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Doctor Jolly

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Re: Why a price on Carbon?
Reply #12 - Jun 1^st, 2011 at 11:05am

True, the environment works in absolutes. But we have no absolute power, no world government. I am 99% certain there will be no binding world agreement on c02 emissions. How can there be without enforcement, and we have not mechanism to enforce.

Therefore it is up to each country to do what they can.

For a market based economy like ours, a carbon price is the most effective mechanism.

For a state controlled economy like China, direct action is the most effective, as all power generation is state owned.

Therefore waiting for a world carbon price is futile. A lot of countries dont need it to reduce emissions. However a local carbon price for us is very relevant.

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Soren

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Re: Why a price on Carbon?
Reply #13 - Jun 1^st, 2011 at 11:18am

Doctor Jolly wrote on Jun 1^st, 2011 at 11:05am:

True, the environment works in absolutes. But we have no absolute power, no world government. I am 99% certain there will be no binding world agreement on c02 emissions. How can there be without enforcement, and we have not mechanism to enforce.

Therefore it is up to each country to do what they can.

For a market based economy like ours, a carbon price is the most effective mechanism.

For a state controlled economy like China, direct action is the most effective, as all power generation is state owned.

Therefore waiting for a world carbon price is futile. A lot of countries dont need it to reduce emissions. However a local carbon price for us is very relevant.

Well, why don't they propose to put the carbon tax on exported fossil fuels as well?

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Doctor Jolly Gold Member Offline Australian Politics Posts: 3808	Re: Why a price on Carbon? Reply #14 - Jun 1^st, 2011 at 11:51am What do you mean ? I would think co2 tax would be applied where the co2 is released. Mining coal doesnt produce much co2 at all. Burning it does.
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