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carbon taxes are the best (Read 17119 times)
freediver
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Re: carbon taxes are the best
Reply #15 - May 5th, 2019 at 1:26pm
 
polite_gandalf wrote on May 2nd, 2019 at 10:17am:
So I read the first three pages, and I assume the rest of the thread is the same: what started with a great topic - the benefits of pricing carbon, gets completely derailed by climate denialists rubbishing the idea of climate change itself.

Pity.

For one thing FD, I'd be interested in why you think a carbon 'tax' (by which I assume you mean a fixed price), is better than a floating price in a market-based emissions trading scheme.

I would have thought most industries would opt for the latter?


Thanks Gandalf. "Industry" does seem to prefer the latter. I assume there are two main reasons behind this. One is that it makes international negotiations difficult to irreconcilable, so it is a barrier to action. The second is that there is a good chance they will be handed the permits for free.

So compared with giving out emissions permits for free, a tax is better for the economy because it allows the reduction of other taxes.

For international negotiations, an agreed minimum internal tax rate, which leaves each government to decide what to do with the revenue, is much easier to negotiate than a trading scheme, which requires an upfront agreement of the emissions each country is allowed. This is particularly difficult for the emerging economies, who based on 1990 levels end up having to buy emissions from rich countries - the only solution to which is a big cash payout from rich to poor countries - equally unpalatable. It also requires far less trust in foreign governments than a trading scheme, which is basically the invention of a new shared currency.

A tax is also better because it can be priced to give a steady decline in emissions, which is the actual goal. It also avoids rapid fluctuations in price that you get when you suddenly reduce permissible emissions and everyone has to make the reduction suddenly, followed by massive drops in the price because it is easier to reduce emissions over the long term than the short term (this happened in Europe with their scheme).
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Re: carbon taxes are the best
Reply #16 - May 12th, 2019 at 8:49am
 
The carbon tax that would leave households better off while addressing climate change

https://www.abc.net.au/news/2018-11-21/the-carbon-tax-that-would-leave-households-better-off/10517652

Today, as part of the UNSW Grand Challenge on Inequality, we released a study entitled A Climate Dividend for Australians that offers a practical solution to the twin problems of climate change and energy affordability.

It is a serious, market-based approach to address climate change through a carbon tax, but it would also leave around three-quarters of Australians financially better off.

It is based on a carbon dividend plan formulated by the Washington-based Climate Leadership Council, which includes luminaries such as Larry Summers, George Schultz and James Baker. It is similar to a plan proposed by the US (and Australian) Citizens' Climate Lobby.

How it would work

Carbon emissions would be taxed at $50 per ton, with the proceeds returned to ordinary Australians as carbon dividends.

The dividends would be significant — a tax-free payment of about $1,300 per adult.

The average household would be $585 a year better off after taking account of price increases that would flow through from producers.

If those households also cut their energy consumption as a result of the tax they would be even better off.

And the payment would be progressive, meaning the lowest-earning households would get the most. The lowest earning quarter would be $1,305 a year better off.

Untaxed exports, fewer regulations

For energy and other producers making things to sell to Australians, the tax would do what all so-called Pigouvian taxes do — make them pay for the damage they do to others.

But Australian exporters to countries without such schemes would have their payments rebated.

Imports from countries without such schemes would be charged "fees" based on carbon content.

This means Australian companies subjected to the tax wouldn't be disadvantaged by imports from countries without it, and nor would importers from countries with such a tax.

The plan would permit the rollback of other restrictions on carbon emissions and expensive subsidies.

Our estimates suggest the rollbacks have the potential to save the Commonwealth $2.5 billion per year.

It's working overseas

Our plan is novel in the Australian context, but similar to one in the Canadian province of British Columbia, which has a carbon tax that escalates until it reaches $52 per ton, with proceeds returned to citizens via a dividend.

Alaska also pays long-term dividends from common-property resources. The proceeds from its oil reserves have been distributed to citizens since 1982, totalling up to $2,770 per person.

It could be phased in

We would be open to a gradual approach. One option we canvass in the report is beginning with a $20 per metric ton tax and increasing it by $5 a year until it reaches $50 after six years.

The dividends would grow with the tax rate, but the bulk of households would immediately be better off in net terms and much better off over time.

And it would be simple

Our plan doesn't create loopholes or incentives to get handouts from the Government, as have previous plans that directed proceeds to polluters.

It will not satisfy climate-change deniers, but then no plan for action on climate change would do that — other than perhaps the Governmment's direct action policy, which provides a costly taxpayer-funded boondoggle to selected winners.

But for those who understand that climate change is real, our plan balances the important benefits we gain from economic development and associated carbon emissions against the social cost of those emissions.

It does it in a way that provides compensation to all Australians, but on an equal basis, making the lowest-income Australians substantially better off.

It is the sort of policy that politicians who believe in both the realities of climate change as well as the power and benefits of markets ought to support.

Richard Holden is a professor of economics and PLuS Alliance Fellow at UNSW. Rosalind Dixon is a professor of law at UNSW. This article originally appeared on The Conversation.
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Re: carbon taxes are the best
Reply #17 - May 12th, 2019 at 8:58am
 
https://greens.org.au/platform/redistribution

The Greens support a carbon price as the simplest, fairest, most effective way to reduce emissions, drive a transition in renewables and reduce household costs. Under our plan, we will legislate to re-introduce an economy-wide carbon price on direct emissions from facilities which emit more than 25,000 tonnes of CO2-e per year.



https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/Browse_by_Topic/ClimateChangeold/responses/economic/carbontax

A carbon tax is a tax on energy sources which emit carbon dioxide. It is a pollution tax, which some economists favour because they tax a 'bad' rather than a 'good' (such as income). Carbon taxes address a negative externality. Externalities arise when an individual production or consumption activity imposes costs or benefits on others. In market transactions, these costs and benefits are not normally reflected in the prices involved in the transaction, or taken into account in the transaction decision.

By placing a cost on these negative externalities the underlying purpose of a carbon tax is to reduce emissions of carbon dioxide and thereby slow global warming. It can be implemented by taxing the burning of fossil fuels—coal, petroleum products such as petrol and aviation fuel, and natural gas—in proportion to their carbon content.

There is some political support for a carbon tax in Australia as a means of implementing a carbon price. Some groups favour this approach as an interim step on the way to an Australian emissions trading scheme. The Howard Government's taskforce that examined options for dealing with climate change, and the more recent Garnaut Climate Change Review, rejected carbon taxes in favour of an emissions trading scheme.

Pros and Cons

Carbon taxes have been said to have the following advantages:

They put a limit on the costs of emissions reduction.

They can be implemented quickly.

They are predictable in their costs. Relatively stable price signals can help business and consumers plan energy spending and provide greater certainty for investments in energy efficiency that have large initial costs.

They are a permanent incentive to reduce emissions. The price of pollutants does not change, as with the operation of a market-based emission trading system.

They are not susceptible to 'strategic behaviour' by firms and non-government organisations that distort any market for trading emissions—such as purchasing a large number of permits and reselling them later at a profit or viewing auction permits in a cap-and-trade system as a right to pollute.

They are economically efficient in that they are transparent, simple and can have a wide coverage.

They can be implemented across a wide variety of economies and therefore are a suitable instrument for coordinated international action on reducing greenhouse gas emissions.

They are a revenue source. They could result in other taxes being reduced, or the proceeds of the carbon tax could be redirected to those most affected to ensure that the introduction of a carbon tax remains revenue neutral.
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Re: carbon taxes are the best
Reply #18 - May 12th, 2019 at 10:24am
 
freediver wrote on Mar 26th, 2019 at 6:59pm:
Schools. Roads. Hospitals. Police.


Oh please get a life willya,

We're going to save the world from ourselves by the supply, demand and cost of carbon derivatives on the open market.

I would rather see labor's $550 billion climate fund policy go into schools roads hospitals and  police...... Wink
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1. There has never been a more serious assault on our standard of living than Anthropogenic Global Warming..Ajax
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Re: carbon taxes are the best
Reply #19 - May 12th, 2019 at 11:52am
 
freediver wrote on May 12th, 2019 at 8:49am:
Carbon emissions would be taxed at $50 per ton, with the proceeds returned to ordinary Australians as carbon dividends.


And being a tax it hits the bottom line. How do companies manage the bottom line? By increasing prices.

It is still the same amount of CO2 emitted. But the consumer price just went up.

freediver wrote on May 12th, 2019 at 8:49am:
But Australian exporters to countries without such schemes would have their payments rebated.


So our coal exports would have the carbon tax paid back to them.

freediver wrote on May 12th, 2019 at 8:49am:
Alaska also pays long-term dividends from common-property resources. The proceeds from its oil reserves have been distributed to citizens since 1982, totalling up to $2,770 per person.


You do realise that is not a carbon tax but royalties for want of a better word.
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Re: carbon taxes are the best
Reply #20 - May 12th, 2019 at 12:00pm
 
freediver wrote on May 12th, 2019 at 8:58am:
A carbon tax is a tax on energy sources which emit carbon dioxide. It is a pollution tax, which some economists favour because they tax a 'bad' rather than a 'good' (such as income).


CO2 is not a pollutant. Roll Eyes

freediver wrote on May 12th, 2019 at 8:58am:
By placing a cost on these negative externalities the underlying purpose of a carbon tax is to reduce emissions of carbon dioxide and thereby slow global warming. It can be implemented by taxing the burning of fossil fuels—coal, petroleum products such as petrol and aviation fuel, and natural gas—in proportion to their carbon content.


If the emitter recovers costs by increasing prices there will be no net gain.

freediver wrote on May 12th, 2019 at 8:58am:
There is some political support for a carbon tax in Australia as a means of implementing a carbon price.



Greenpeace and other "political" organisations.

freediver wrote on May 12th, 2019 at 8:58am:
Pros and Cons


And you only gave the supposed PRO's. Grin Grin Grin Grin Grin


freediver wrote on May 12th, 2019 at 8:58am:
They are not susceptible to 'strategic behaviour' by firms and non-government organisations that distort any market for trading emissions—such as purchasing a large number of permits and reselling them later at a profit or viewing auction permits in a cap-and-trade system as a right to pollute.


Nothing there about not recovering increased costs. And any tax is a cost.

freediver wrote on May 12th, 2019 at 8:58am:
They are a revenue source. They could result in other taxes being reduced, or the proceeds of the carbon tax could be redirected to those most affected to ensure that the introduction of a carbon tax remains revenue neutral.


If you are giving the money back to the consumer you can't just spend again where you like. Grin Grin Grin Grin Grin

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Re: carbon taxes are the best
Reply #21 - May 12th, 2019 at 12:14pm
 
Quote:
And being a tax it hits the bottom line. How do companies manage the bottom line? By increasing prices.


Either that or avoiding paying the tax. Either way it works. If they avoid it, they reduce emissions. If they pass the price on, their customers will find ways to avoid the emissions. Or just pay the tax.
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Re: carbon taxes are the best
Reply #22 - May 12th, 2019 at 12:27pm
 
freediver wrote on May 12th, 2019 at 12:14pm:
Either that or avoiding paying the tax. Either way it works.


If you increase the prices you haven't reduced the emissions.


freediver wrote on May 12th, 2019 at 12:14pm:
If they avoid it, they reduce emissions.



So how are emissions reduced making steel? You need coking coal for that. How about cement; that is a big emitter. You gunna build a mud daub hut?

freediver wrote on May 12th, 2019 at 12:14pm:
If they pass the price on, their customers will find ways to avoid the emissions.


The customers can't avoid the emissions. It is in the product. They buy the product with the emissions embedded.

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Re: carbon taxes are the best
Reply #23 - May 12th, 2019 at 1:34pm
 
If you increase the price you reduce emissions, unless you are from the special school of economics where price does not affect behavior.
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Re: carbon taxes are the best
Reply #24 - May 12th, 2019 at 1:55pm
 
freediver wrote on May 12th, 2019 at 1:34pm:
If you increase the price you reduce emissions, unless you are from the special school of economics where price does not affect behavior.



Only if price is inelastic.
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Re: carbon taxes are the best
Reply #25 - May 12th, 2019 at 2:10pm
 
freediver wrote on May 12th, 2019 at 12:14pm:
[quote]And being a tax it hits the bottom line. How do companies manage the bottom line? By increasing prices.


The fixed price on carbon implemented in Australia was only technically a tax it could have just as easily been implemented as not a tax, it would have cost the same. "And being a tax" has little relevance if any.

The extra cost is a serious incentive to reduce carbon dioxide output and thus improve the bottom line while remaining competitive in the market.




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Re: carbon taxes are the best
Reply #26 - May 12th, 2019 at 2:13pm
 
lee wrote on May 12th, 2019 at 1:55pm:
freediver wrote on May 12th, 2019 at 1:34pm:
If you increase the price you reduce emissions, unless you are from the special school of economics where price does not affect behavior.



Only if price is inelastic.


Would you like to elaborate?
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Re: carbon taxes are the best
Reply #27 - May 12th, 2019 at 2:21pm
 
polite_gandalf wrote on May 2nd, 2019 at 10:17am:
So I read the first three pages, and I assume the rest of the thread is the same: what started with a great topic - the benefits of pricing carbon, gets completely derailed by climate denialists rubbishing the idea of climate change itself.

Pity.

For one thing FD, I'd be interested in why you think a carbon 'tax' (by which I assume you mean a fixed price), is better than a floating price in a market-based emissions trading scheme.

I would have thought most industries would opt for the latter?


I hope that you don't mind my view on this.

The main reason is that the market based process is known to be deeply corrupt with criminal players involves money ciphering and poor results all this is international in nature and can not be controlled by Australia. The money collected is controlled internationally and spent on the same basis.

The Fixed price model we had was managed in Australia by Australians the money was directed into the areas that we deem most needed. Any corruption can be managed and acted on by us and the money used to address problems in Australia.

i.e. more efficient, more cost effective, greater impact at a lower cost.
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Re: carbon taxes are the best
Reply #28 - May 12th, 2019 at 2:27pm
 
freediver wrote on May 12th, 2019 at 2:13pm:
Would you like to elaborate?


Seeing as you raised the subject of economics, I would have thought you knew.

The sensitivity to price is measured in its elasticity or inelasticity.

A common product with many suppliers will have an inelastic price, as the suppliers fight for market share.

A scarce product with few suppliers will be largely elastic as the consumer has limited sources of purchase.

Both water and electricity are largely elastic. As people won't forego them.

Ice creams on the other hand are largely inelastic. There being many suppliers and also the fact that it comes from discretionary spending.

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Re: carbon taxes are the best
Reply #29 - May 12th, 2019 at 2:30pm
 
Dnarever wrote on May 12th, 2019 at 2:10pm:
The extra cost is a serious incentive to reduce carbon dioxide output and thus improve the bottom line while remaining competitive in the market.


If the market is similarly affected there is no pressure on prices.

And seeing as part of Labor's policy is that imports will be affected if not taxed at source, there will be less incentive.
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