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.

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

MARKET FAILURE IS ECONOMICS 101!

THE FORUM DOES NOT DISPUTE THIS AS FACT!! 

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?????

 

Quote:


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.

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?

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.

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.

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.

Doctor Jolly wrote on Jun 1^st, 2011 at 11:51am:



Very clever.



WHat's the bruhaha about tobacco companies? They are not smoking the cigis. Mebbe we shouldn't tax the sale of tobacco, only the smoking of it. We shouldn't restrict the sale of alcohol to kiddies but only tell 'em not to drink it. 'Buy it, sprog, just don't drink it.'
Smart.

Soren wrote on Jun 1^st, 2011 at 1:59pm:

I dont think its clever at all. I thought it was bloody obvious.

Another bad analogy. A tax on fags and booze is trying to address different things than a carbon tax.

If someone develops a coal fired sequestation technique that makes burning coal polute less co2, thats where the co2 tax/price advantage takes place over someone who burns coal without a care in the world.
It must be at the release of c02 to drive inovation.

Another cost comparison:

The 8.619 million tonnes of carbon emissions we will stop can be offset by planting 196 square KM of forest. At $2 per seedling and 2500 trees per hectare, thats about $98M. Compare that to the $11.5Bn we will pay for the carbon tax and the negative impact on the economy.

If they are going to go ahead with the tax and are serious about this, they could take the $11.5Bn and use it to plant 100 times the 196sqkm and viola, were carbon neutral for the next century.

Original Reeper wrote on Jun 1^st, 2011 at 4:41pm:


Without wanting to torture this analogy to death, we only have two choices... plug holes or sink.  We are also spraying our own machine gun around in there.  We at least need to stop that.

In fact every australian is spraying around their kalasnicov (sp?) at will , and every chinese is sharing a single-shot 22 between  a dozen of them.

Doctor Jolly wrote on Jun 1^st, 2011 at 4:49pm:


We shoot 1.35% of the holes. For every hole we shoot, the Chinese shoot 14, the US shoots 12 and the EU shoots 10. The Chinese will increase the number of holes they shoot each year.

We are being told - by Cate Blanchette on behalf of the govt- that it will finally "do something about the environment". How can reducing 1.35% by 5% -  a global change of 0.067% - constitute "doing something?"

Why should we suck $11.5Bn out of the economy each year - 70% of which will come out of areas other than carbon emitting activities thanks to the inelastic nature of power demand - when it will make no discernable difference to the environment?

To assuage middle class guilt?
So we can pat each other on the  back and say "well we've done our bit"?

Or is it so Labor can keep the Greens happy and retain government?

Something else I just found out: Baseload stations produce 60-65% of Australia's electricity. The remainder is from intermediate or peak load stations.

Nearly all of Australia's intermediate and peak load electricity already comes from either gas turbines (very low carbon emissions) or hydro (zero carbon emissions). This is where any tax-induced reduction in power useage will occur.

Its the baseload energy from coal powered stations that pumps out the CO2, and you cannot regulate the output from a baseload power station - its either on, or off.

So the already low drop in electricity use from the proposed carbon price will only effect the already eco-frinedly low- or zero-carbon output intermediate and peak stations.

Doctor Jolly wrote on Jun 2^nd, 2011 at 9:04am:


Yes, the consequences of global warming are dire. (I doubt it will involve much cannibalism in Australia). But if we are going to do something, that something must be effective.

Implementing a tax is doing "something", just not about the environment. Group prayer is doing "something" and will probably be as effective.

Doc, my point is carbon tax = doing nothing to reduce carbon emissions, and that is my main concern. Australians will believe once a tax is in place we will have done our bit when it is far from the truth.

We need alternatives, and that is my other gripe - the opposition have been too busy hoping the climate change deniers will win out rather than forcing an examination of the facts and figures relating to the impact of a tax compared to alternatives.

I don't have the answers. I do however have a lot of unanswered questions, and as a result, a lack of options.

I'm glad you are not of the "do nothing" variety. Those types really p1ss me off.  Adn I'm glad you share the opinion that Australia needs only worry about its own backyard. We cant control the world, so lets not try.

so, the question becomes what is the best thing to do.  The goals are obviously going to be:
1) Reduce our c02 emissions.
2) Minimize cost to the economy.
3) Immune to political whims and corruption.

There will be a cost. That cant be escaped. We get electricity from a very cheap, but poluting source; coal.

Many studies have shown that a market based approach is more cost effective than a big government approach.  

We have seen the big government approach fail already in Australia. In NSW we have had the solar industry go from boom to bust just on the changing of government.  It was an expensive scheme targetting only one solution (PV). This is the government picking winners approach. And a bit of a mess.

The market approach is to price (tax) carbon dioxide to a level to drive down the amount generated. Initially, the price will still make coal cheaper than alternatives, but more expensive than it is now.
This will drive those not getting full compo to seek more efficient useage.
Once the price rises to a point where other alternatives are viable, private and public money can be invested to build these with a known price "guarantee" return on investment.

Why would only peak drop with greater efficiency ?

The first step is to slow the growth of electricity demand so we dont build more coal powered stations.

Like I said above, the carbon tax is the stick, seed funding in alternatives is the carrot.  But the government shouldnt be the ones picking and choosing which technologies to invest in. Its too corruptable.  We've already seen 100's of millions wasted on carbon seqestation. Stupid idea spruked by the coal industry. Let the market decide.

Doctor Jolly wrote on Jun 1^st, 2011 at 4:53pm:


Well, thats actually four issues, but anyway.....
1. Theres no shortage of deforested land we can replant that has little or no agricultural potential.
2. So what; plenty of broke farms out there unable to produce anything cost effectively. Also see point 1.
3. Thats one tree, the forest ecosystem holds the carbon as long as the forest is there
4. Theres been fires from day one on planet earth and yet there's still plenty of forests about. Forests are never "destroyed" by fires, Australian forests need fire to facilitate reproduction.  They grow back pretty quickly too.   

Doctor Jolly wrote on Jun 3^rd, 2011 at 8:51am:


It's interesting that you're in favour of a tax with no potential to effect the environment, yet dismiss out of hand an accepted method of reducing existing C02.

At any rate, the sequestration issue probably belongs on another thread if you are interested in continuing on that track.

Australia's current CO2e emissions represent approximately 1.5% of the current global total. Some suggest that this seems to be a rather small portion, and that imposing a tax or price on carbon emission in Australia will have little or no effect.

I would just like to point out that if we were to exempt every country whose emissions represent 1.5% or less of the global total, we would exempt approximately 41% of global emissions!

Australia is a large emitter in absolute terms, and an absolutely bloody enormous emitter on a per capita basis.

http://www.climatespectator.com.au/commentary/charting-course-through-carbon-war...

Original Reeper wrote on Jun 26^th, 2011 at 4:33pm:


Yes it's worth it. Despite what the deniers and delayers would have us believe, there WILL be an international agreement, it is inevitable, and we will end up having to do this eventually anyway. And the plain fact of it is that the longer we delay pricing carbon then the more expensive the change will be. It makes economic sense to get this reform over and done with.

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

An ETS puts a cap on emissions and the cap determines the price of emitting greenhouse gases. National emissions are capped, and the cap gradually tightened over time. A market is created in which emissions permits can be traded. There is now an incentive for business to reduce greenhouse emissions, as there is a price for emitting. The governments proposal is an ETS with an initial fixed price period. The fixed price period works effectively as a tax, because there is no cap on emissions and the permits expire each year. The main reductions during this period are going to come from direct funding of carbon projects through revenue, not from the market.

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

A tax, which again is not what the governments policy is, effectively caps emissions by making emitting more expensive than investing in reducing emissions. The higher the tax the greater the incentive for business to lower their emissions. There probably has been reports done on this but the question is largely irrelevant to the current policy debate.

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?

Depends individually on each household. However an ETS is not really about changing individuals behaviour, it's about transforming the economy. Households are ultimately limited by the source of their power. If you're getting your power from brown coal power plants individual reductions won't be enough to make a significant difference.

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

I think we can all be pretty safe to assume that business will pass on 100% of the costs to consumers. However, the point of an ETS, or for that matter a carbon tax, is that business' that find ways to reduce their emissions will be able to offer cheaper products/services and therefore be more successful.

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

The policy of an ETS is based on a long term cost-benefit analyses of the predicted impacts of climate change on the economy. However in the short term I'm afraid I don't know enough about economics to answer that. There is an argument that a clear policy of an ETS, especially if it were to have bipartisan support (unfortunately however that is not the case) would drive long term investment as it gives some certainty to the economy. The government is providing significant compensation, I don't think that it will cause a slow down in the economy, but that's just my opinion. Whatever else Ross Garnaut might be, he is a well respected and successful economist.

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

This I am unsure of, I think it will have to wait until the policy is announced. Australia's coal exports are estimated to increase by about 40% over the next 10 years. But I'm unsure how the ETS will deal with exports. I was rather under the impression that, for instance in the case of oil, the miners are obligated to buy emissions permits based on a scale of the projected emissions of their product once it is sold. Now, the government has indicated that private citizens won't pay more for petrol, so don't take this example too literally. But for instance if private use of petrol wasn't exempt, when you buy petrol from the pump, you will pay for the projected emissions that you're going to make. You could, for instance, not emit anything and bury a barrel of petrol in your backyard. However you will still have paid for the emissions that you would have made for driving that car. But whether or not this applies if the oil is sold to someone overseas, I don't know.

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

What flaw? They do not want to restrict exports of coal in any way. It is far better for them to simply call the policy "a great big new tax", or a "tax on breathing", or whatever the latest soundbyte is, than to draw attention to their own sad excuse for a policy.

Why has the press not examined the economic fail?

What economic fail? Most economists agree that the governments policy is better than Abbotts.

In light of this I would ask all proponents of a carbon tax to please stop using the lie that it is to do something about climate change. Its not, Garnaut himself has said so. It's about impressing other countries. Is it worth it?

This is just your personal opinion and Garnauts report does not back up your point of view. He cites that there are many countries who already have an ETS or who are heading towards an ETS and that Australia as an emissions heavy economy is extremely vulnerable in this area. That should we find ourselves caught behind on introducing an ETS it could have serious consequences to our global competitiveness.

Personally I do not see Abbotts policy as an alternative to the governments. I think that in reality, an Abbott led coalition represents climate sceptics who are not interested in serious action on climate change. Malcolm Turnbull should be their shadow climate change minister

Original Reeper wrote on Jun 5^th, 2011 at 11:04am:

sequestration aint 'accepted' you propaganda merchant!!!

progressiveslol wrote on Jul 7^th, 2011 at 7:45pm:



Your premise (highlighted) is wrong and I'm not surprised you don't provide evidence, because it's a baseless claim.

Secondly, if you had really been following this issue, the problem is not the warming so far, but the warming projected for the future.

Doctor Jolly wrote on Jun 1^st, 2011 at 4:53pm:


- also the fact that as the global temperature increases, more and more forests will switch from being a net carbon sink to being a net carbon emitter.

gizmo_2655 wrote on Aug 7^th, 2011 at 4:58pm:

The price on carbon has been sold and China has left Tony Abbott with no clothes on!!

THIS IS FACT!!