Australian Politics Forum - The hilarious side of the carbon dioxide tax

Shane B

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Re: The hilarious side of the carbon dioxide tax
Reply #15 - Oct 25^th, 2012 at 9:05pm

MOTR wrote on Oct 25^th, 2012 at 8:56pm:

Shane B wrote on Oct 25^th, 2012 at 8:54pm:

MOTR wrote on Oct 25^th, 2012 at 8:19pm:

Armchair_Politician wrote on Oct 25^th, 2012 at 8:00pm:

Prior to actually passing the legislation enabling the carbon dioxide tax to become law, the Greens and ALP went to great lengths to explain that while the cost of electricity would rise and we'd get (some/little) compensation, the whole point of the tax was to make electricity more expensive in the expec tation that we'd use it less in order to save money and the environment all at once.

However, now that electricity prices are rising at nearly double the CPI, the ALP and Greens are going to equally great lengths to say that the tax isn't causing electricity prices to rise (or not by much at the least), in a direct contradiction to their previous position on this issue. I've been waiting and waiting and waiting for someone from the Greens or ALP to stand up and tell us that this is the whole point of the carbon dioxide tax - to make electricity more expensive!

The other hilarious aspect of this tax is the compensation. Why tax us on one hand while giving compensation with the other? Kinda makes the whole deal rather pointless, eh! Also, Gillard's assertion that businesses can simply pass on the extra costs associated with the carbon dioxide tax to customers. That sounds good, but unfortunately our PM and Treasurer live in a world of make-believe because in the real world that we live in, it's not always possible to do so, as is the case with fruit and vegie growers who supply to large supermarkets, as those supermarkets refuse to accept any price rises (but gladly pass on the added cost of electricity to their customers - you and me - in the form of more expensive products).

I tell ya, it's a strange, strange world we live in under Labor and the Greens!!! Grin

Perhaps Shane the economist will come on later to explain the income effect and the price effect.

Don't forget the substitution effect, because the price effect is the sum of the substitution and income effects.

Cheesy

And supposing that Gillard has compensated households adequately then might want to consider the Hicksian demand function.

Away you go, Shane. Explain it.

Why don't you have a go at it seeing as you think you know it all. I can grade you as I have been a lecturer at ANU.

I've been putting my neck out and posting up charts and analysis.

More than happy to draw you up a quote for this and your other request on government debt. I get paid to do this stuff every day.

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Julia Gillard - twice selected, never elected.

We're still paying for the Whitlam Government.

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John Smith

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Re: The hilarious side of the carbon dioxide tax
Reply #16 - Oct 25^th, 2012 at 9:07pm

Shane B wrote on Oct 25^th, 2012 at 9:05pm:

MOTR wrote on Oct 25^th, 2012 at 8:56pm:

Shane B wrote on Oct 25^th, 2012 at 8:54pm:

MOTR wrote on Oct 25^th, 2012 at 8:19pm:

Armchair_Politician wrote on Oct 25^th, 2012 at 8:00pm:

Prior to actually passing the legislation enabling the carbon dioxide tax to become law, the Greens and ALP went to great lengths to explain that while the cost of electricity would rise and we'd get (some/little) compensation, the whole point of the tax was to make electricity more expensive in the expec tation that we'd use it less in order to save money and the environment all at once.

However, now that electricity prices are rising at nearly double the CPI, the ALP and Greens are going to equally great lengths to say that the tax isn't causing electricity prices to rise (or not by much at the least), in a direct contradiction to their previous position on this issue. I've been waiting and waiting and waiting for someone from the Greens or ALP to stand up and tell us that this is the whole point of the carbon dioxide tax - to make electricity more expensive!

The other hilarious aspect of this tax is the compensation. Why tax us on one hand while giving compensation with the other? Kinda makes the whole deal rather pointless, eh! Also, Gillard's assertion that businesses can simply pass on the extra costs associated with the carbon dioxide tax to customers. That sounds good, but unfortunately our PM and Treasurer live in a world of make-believe because in the real world that we live in, it's not always possible to do so, as is the case with fruit and vegie growers who supply to large supermarkets, as those supermarkets refuse to accept any price rises (but gladly pass on the added cost of electricity to their customers - you and me - in the form of more expensive products).

I tell ya, it's a strange, strange world we live in under Labor and the Greens!!! Grin

Perhaps Shane the economist will come on later to explain the income effect and the price effect.

Don't forget the substitution effect, because the price effect is the sum of the substitution and income effects.

Cheesy

And supposing that Gillard has compensated households adequately then might want to consider the Hicksian demand function.

Away you go, Shane. Explain it.

Why don't you have a go at it seeing as you think you know it all. I can grade you as I have been a lecturer at ANU.

I've been putting my neck out and posting up charts and analysis.

More than happy to draw you up a quote for this and your other request on government debt. I get paid to do this stuff every day.

ANU must really be dropping their standards .....

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I hope that bitch who was running their brothels for them gets raped with a cactus.

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rabbitoh07

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Re: The hilarious side of the carbon dioxide tax
Reply #17 - Oct 25^th, 2012 at 9:12pm

Armchair_Politician wrote on Oct 25^th, 2012 at 8:00pm:

Prior to actually passing the legislation enabling the carbon dioxide tax to become law, the Greens and ALP went to great lengths to explain that while the cost of electricity would rise and we'd get (some/little) compensation, the whole point of the tax was to make electricity more expensive in the expectation that we'd use it less in order to save money and the environment all at once.

However, now that electricity prices are rising at nearly double the CPI, the ALP and Greens are going to equally great lengths to say that the tax isn't causing electricity prices to rise (or not by much at the least), in a direct contradiction to their previous position on this issue. I've been waiting and waiting and waiting for someone from the Greens or ALP to stand up and tell us that this is the whole point of the carbon dioxide tax - to make electricity more expensive!

The other hilarious aspect of this tax is the compensation. Why tax us on one hand while giving compensation with the other? Kinda makes the whole deal rather pointless, eh! Also, Gillard's assertion that businesses can simply pass on the extra costs associated with the carbon dioxide tax to customers. That sounds good, but unfortunately our PM and Treasurer live in a world of make-believe because in the real world that we live in, it's not always possible to do so, as is the case with fruit and vegie growers who supply to large supermarkets, as those supermarkets refuse to accept any price rises (but gladly pass on the added cost of electricity to their customers - you and me - in the form of more expensive products).

I tell ya, it's a strange, strange world we live in under Labor and the Greens!!! Grin

Try again sonny.

The whole point of the tax was NOT to make electricity more expensive in the expectation that we'd use it less in order to save money and the environment all at once.

The whole point of the tax was to make electricity generated by burning fossil fuels more expensive in the expectation that generators would use other means to generate electricity in order to save money and the environment all at once.

Are you really that ignorant? Or are you just deliberately lying?

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Shane B

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Re: The hilarious side of the carbon dioxide tax
Reply #18 - Oct 25^th, 2012 at 9:26pm

rabbitoh07 wrote on Oct 25^th, 2012 at 9:12pm:

Armchair_Politician wrote on Oct 25^th, 2012 at 8:00pm:

Prior to actually passing the legislation enabling the carbon dioxide tax to become law, the Greens and ALP went to great lengths to explain that while the cost of electricity would rise and we'd get (some/little) compensation, the whole point of the tax was to make electricity more expensive in the expectation that we'd use it less in order to save money and the environment all at once.

However, now that electricity prices are rising at nearly double the CPI, the ALP and Greens are going to equally great lengths to say that the tax isn't causing electricity prices to rise (or not by much at the least), in a direct contradiction to their previous position on this issue. I've been waiting and waiting and waiting for someone from the Greens or ALP to stand up and tell us that this is the whole point of the carbon dioxide tax - to make electricity more expensive!

The other hilarious aspect of this tax is the compensation. Why tax us on one hand while giving compensation with the other? Kinda makes the whole deal rather pointless, eh! Also, Gillard's assertion that businesses can simply pass on the extra costs associated with the carbon dioxide tax to customers. That sounds good, but unfortunately our PM and Treasurer live in a world of make-believe because in the real world that we live in, it's not always possible to do so, as is the case with fruit and vegie growers who supply to large supermarkets, as those supermarkets refuse to accept any price rises (but gladly pass on the added cost of electricity to their customers - you and me - in the form of more expensive products).

I tell ya, it's a strange, strange world we live in under Labor and the Greens!!! Grin

Try again sonny.

The whole point of the tax was NOT to make electricity more expensive in the expectation that we'd use it less in order to save money and the environment all at once.

The whole point of the tax was to make electricity generated by burning fossil fuels more expensive in the expectation that generators would use other means to generate electricity in order to save money and the environment all at once.

Are you really that ignorant? Or are you just deliberately lying?

Sorry, it's designed to do both. The Treasury modelling says:

Carbon pricing reduces emissions from electricity generation by shifting the generation mix towards cleaner technologies and moderating growth in electricity demand.

http://archive.treasury.gov.au/carbonpricemodelling/content/update/Modelling_upd...

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Julia Gillard - twice selected, never elected.

We're still paying for the Whitlam Government.

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MOTR

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Re: The hilarious side of the carbon dioxide tax
Reply #19 - Oct 25^th, 2012 at 9:35pm

Shane B wrote on Oct 25^th, 2012 at 9:05pm:

MOTR wrote on Oct 25^th, 2012 at 8:56pm:

Shane B wrote on Oct 25^th, 2012 at 8:54pm:

MOTR wrote on Oct 25^th, 2012 at 8:19pm:

Armchair_Politician wrote on Oct 25^th, 2012 at 8:00pm:

Prior to actually passing the legislation enabling the carbon dioxide tax to become law, the Greens and ALP went to great lengths to explain that while the cost of electricity would rise and we'd get (some/little) compensation, the whole point of the tax was to make electricity more expensive in the expec tation that we'd use it less in order to save money and the environment all at once.

However, now that electricity prices are rising at nearly double the CPI, the ALP and Greens are going to equally great lengths to say that the tax isn't causing electricity prices to rise (or not by much at the least), in a direct contradiction to their previous position on this issue. I've been waiting and waiting and waiting for someone from the Greens or ALP to stand up and tell us that this is the whole point of the carbon dioxide tax - to make electricity more expensive!

The other hilarious aspect of this tax is the compensation. Why tax us on one hand while giving compensation with the other? Kinda makes the whole deal rather pointless, eh! Also, Gillard's assertion that businesses can simply pass on the extra costs associated with the carbon dioxide tax to customers. That sounds good, but unfortunately our PM and Treasurer live in a world of make-believe because in the real world that we live in, it's not always possible to do so, as is the case with fruit and vegie growers who supply to large supermarkets, as those supermarkets refuse to accept any price rises (but gladly pass on the added cost of electricity to their customers - you and me - in the form of more expensive products).

I tell ya, it's a strange, strange world we live in under Labor and the Greens!!! Grin

Perhaps Shane the economist will come on later to explain the income effect and the price effect.

Don't forget the substitution effect, because the price effect is the sum of the substitution and income effects.

Cheesy

And supposing that Gillard has compensated households adequately then might want to consider the Hicksian demand function.

Away you go, Shane. Explain it.

Why don't you have a go at it seeing as you think you know it all. I can grade you as I have been a lecturer at ANU.

I've been putting my neck out and posting up charts and analysis.

More than happy to draw you up a quote for this and your other request on government debt. I get paid to do this stuff every day.

Cetainly. An increase in price will have a substitution effect and an income effect. An increase in price will reduce real income, reducing demand for all goods, it will also encourage consumers to switch their consumption to goods that are relatively cheaper. Both will lead to a fall in demand. If we compensate workers for the income effect, demand will increase, but to a level below the initial level of demand. The difference is the substitution effect. Although consumers have the same level of income they will shift their consumption from the more expensive good to the cheaper substitute.

So Shane, are you going to deny the substitution effect.

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« Last Edit: Oct 25^th, 2012 at 9:45pm by MOTR »

Hunt says Coalition accepts IPCC findings

"What does this mean? It means that we need to do practical things that actually reduce emissions."

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rabbitoh07

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Re: The hilarious side of the carbon dioxide tax
Reply #20 - Oct 25^th, 2012 at 9:40pm

Shane B wrote on Oct 25^th, 2012 at 9:26pm:

rabbitoh07 wrote on Oct 25^th, 2012 at 9:12pm:

Armchair_Politician wrote on Oct 25^th, 2012 at 8:00pm:

Prior to actually passing the legislation enabling the carbon dioxide tax to become law, the Greens and ALP went to great lengths to explain that while the cost of electricity would rise and we'd get (some/little) compensation, the whole point of the tax was to make electricity more expensive in the expectation that we'd use it less in order to save money and the environment all at once.

However, now that electricity prices are rising at nearly double the CPI, the ALP and Greens are going to equally great lengths to say that the tax isn't causing electricity prices to rise (or not by much at the least), in a direct contradiction to their previous position on this issue. I've been waiting and waiting and waiting for someone from the Greens or ALP to stand up and tell us that this is the whole point of the carbon dioxide tax - to make electricity more expensive!

The other hilarious aspect of this tax is the compensation. Why tax us on one hand while giving compensation with the other? Kinda makes the whole deal rather pointless, eh! Also, Gillard's assertion that businesses can simply pass on the extra costs associated with the carbon dioxide tax to customers. That sounds good, but unfortunately our PM and Treasurer live in a world of make-believe because in the real world that we live in, it's not always possible to do so, as is the case with fruit and vegie growers who supply to large supermarkets, as those supermarkets refuse to accept any price rises (but gladly pass on the added cost of electricity to their customers - you and me - in the form of more expensive products).

I tell ya, it's a strange, strange world we live in under Labor and the Greens!!! Grin

Try again sonny.

The whole point of the tax was NOT to make electricity more expensive in the expectation that we'd use it less in order to save money and the environment all at once.

The whole point of the tax was to make electricity generated by burning fossil fuels more expensive in the expectation that generators would use other means to generate electricity in order to save money and the environment all at once.

Are you really that ignorant? Or are you just deliberately lying?

Sorry, it's designed to do both. The Treasury modelling says:

Carbon pricing reduces emissions from electricity generation by shifting the generation mix towards cleaner technologies and moderating growth in electricity demand.

http://archive.treasury.gov.au/carbonpricemodelling/content/update/Modelling_upd...

Yes - exactly. Just as I wrote previously

The whole point of the tax was NOT to make electricity more expensive in the expectation that we'd use it less in order to save money and the environment all at once.

To write what he did - AP is either very ignorant or very dishonest.

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Shane B Gold Member Offline Australian Politics Posts: 1473 Canberra Gender:	Re: The hilarious side of the carbon dioxide tax Reply #21 - Oct 25^th, 2012 at 9:45pm Well done, HD. You got the bit right about the substution effect, which a lot find very confusing.
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MOTR

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Re: The hilarious side of the carbon dioxide tax
Reply #22 - Oct 25^th, 2012 at 9:50pm

Shane B wrote on Oct 25^th, 2012 at 9:45pm:

Well done, HD. You got the bit right about
the substution effect, which a lot find very confusing.

Briliant, since we both understand the substitution effect, perhaps you can explain how compensating consumers for the income effect will negate the substitution effect.

I can understand why most people don't get it, but as an economist why don't you get it?

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Hunt says Coalition accepts IPCC findings

"What does this mean? It means that we need to do practical things that actually reduce emissions."

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Shane B Gold Member Offline Australian Politics Posts: 1473 Canberra Gender:	Re: The hilarious side of the carbon dioxide tax Reply #23 - Oct 25^th, 2012 at 9:52pm I think with the carbon tax the substitution effect will be extremely small due to denand being inelastic and alternatives relatively more expensive.
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rabbitoh07

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Re: The hilarious side of the carbon dioxide tax
Reply #24 - Oct 25^th, 2012 at 9:58pm

Shane B wrote on Oct 25^th, 2012 at 9:52pm:

I think with the carbon tax the substitution effect will be extremely small due to denand being inelastic and alternatives relatively more expensive.

I think you are displaying you ignorance because the demand is not at all inelastic and alternatives are very much price competitive, even with the massive subsidies given to coal production and coal fired generation.

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MOTR Gold Member Offline Australian Politics Posts: 6646	Re: The hilarious side of the carbon dioxide tax Reply #25 - Oct 25^th, 2012 at 9:59pm Shane B wrote on Oct 25^th, 2012 at 9:52pm: I think with the carbon tax the substitution effect will be extremely small due to denand being inelastic and alternatives relatively more expensive. Perhaps it might be worthwhile looking at some data. Is your opinion informed by data?
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rabbitoh07

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Re: The hilarious side of the carbon dioxide tax
Reply #26 - Oct 25^th, 2012 at 10:07pm

MOTR wrote on Oct 25^th, 2012 at 9:59pm:

Shane B wrote on Oct 25^th, 2012 at 9:52pm:

I think with the carbon tax the substitution effect will be extremely small due to denand being inelastic and alternatives relatively more expensive.

Perhaps it might be worthwhile looking at some data. Is your opinion informed by data?

Yes. Show us the data about alternatives being "more expensive" (and remember to subtract the subsides to coal)

Solar power generated by photovoltaic cells on Australian rooftops has become so cheap and efficient that they now produce electricity for the same price that is charged by the electricity grid.
http://www.abc.net.au/news/2011-09-07/solar-industry-celebrates-grid-parity/2875...

The cost of electricity from onshore wind turbines will drop 12% in the next five years thanks to a mix of lower-cost equipment and gains in output efficiency, according to new research from Bloomberg New Energy Finance.

The best wind farms in the world already produce power as economically as coal, gas and nuclear generators; the average wind farm will be fully competitive by 2016.
http://bnef.com/PressReleases/view/172

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Shane B

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Re: The hilarious side of the carbon dioxide tax
Reply #27 - Oct 25^th, 2012 at 10:08pm

If the households are compensated enough, this will offset the substituion effect by allowing them to purchase a combination of goods on their original indifference curve. A Hicksian demand curve will show the households new consumption choice after the price change while being compensated enough to allow the household to have the same level of utility as they did previously. Albeit the composition of the consumption bundle might have changed.

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MOTR

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Re: The hilarious side of the carbon dioxide tax
Reply #28 - Oct 25^th, 2012 at 10:13pm

Armchair_Politician wrote on Oct 25^th, 2012 at 9:00pm:

MOTR wrote on Oct 25^th, 2012 at 8:54pm:

Perhaps Mother Nature herself.

http://4.bp.blogspot.com/-Ra14mEm1Gmk/TcDEKdHModI/AAAAAAAABE4/OrVJTehVoSc/s1600/...

Clearly a fake photograph...

Are you serious, armchair?

Is there some level of irony I'm missing here?

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Hunt says Coalition accepts IPCC findings

"What does this mean? It means that we need to do practical things that actually reduce emissions."

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Shane B

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Re: The hilarious side of the carbon dioxide tax
Reply #29 - Oct 25^th, 2012 at 10:15pm

rabbitoh07 wrote on Oct 25^th, 2012 at 9:58pm:

Shane B wrote on Oct 25^th, 2012 at 9:52pm:

I think with the carbon tax the substitution effect will be extremely small due to denand being inelastic and alternatives relatively more expensive.

I think you are displaying you ignorance because the demand is not at all inelastic and alternatives are very much price competitive, even with the massive subsidies given to coal production and coal fired generation.

Um, yes it is inelastic. Here are some estimates reviewed by the Productivity Commission last year:

http://www.pc.gov.au/__data/assets/pdf_file/0003/109929/21-carbon-prices-appendi...

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Julia Gillard - twice selected, never elected.

We're still paying for the Whitlam Government.

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