Re: Carbon tax
The govt wants to lead the world and look good at any cost. To do that they pick an emotive world wide issue.
A number of countries have implemented an Emissions Trading Scheme (ETS or Cap in Trade as it's also referred to). In 2006, the previous Howard Liberal government began looking into implementing an ETS and the findings contained in the report that was issued in 2007 somewhat parallels what this government is proposing.
Australia must reduce it's carbon emmissions. Coal Fired Power stations are huge gerenerators of carbon emissions. But if they are shut down where will the large coal miners that employ an army of Labour votors sell their coal. If they can not then their labour voting employees will be really pissed when they do not have jobs.
ETS is NOT about shuting down industries. It's about finding alternative least cost & low emission processes that, when measured nationally across ALL industries, are aimed at reducing up to 5% of the amount of CO2 pollution being pumped into the atmosphere by 2020.
Do not force heavy industry which is heavily unionised and Labour friendly to cut their emissions just introduce a Tax on them. Then spread the tax around so it is not such a burden that they have to shed jobs.
Economists universally do not support this approach. Their reasoning (identified in business models) is that taxing these industries WILL result in them closing down. Economists favour a "market based" approach were Carbon Credits can be traded. It is this approach that has been (or is being implemented) by those countries that have introduced ETS.
Its all smoke and mirrors. I can not see one definate area where emissions will be reduced.
Were a business is capable of reducing its carbon outputs, it has the potential to make money by on-selling its excess carbon credits to a business that cannot (or it's too costly to) reduce its carbon outputs. This is the basis of the market based approach (or Cap in Trade) of the ETS.
A simple explanaton of a carbon trading scheme.
I have a weekly Garbage Service but my bin is only half full on bin days. The guy next door has lots more garbage than will fit his bin. He pays me to put his garbage in my Bin. Now we have two full bins and the same amount of combined garbage. Ive been paid. There is no surplus garbage but no less either.
This is a good example, but it needs to be put into some context. You pay your land rates and you are entitled to a weekly bin collection. This is the same as being allocated a carbon credit. If your bin and that of your neighbour's are full, then it's things are as they are at the moment. However, you change your practices by recycling, not buying products in individual containers, bulk buying etc etc. As a result, you are able to reduce the amount of garbage that you put into your bin. Your neighbour, unfortunately, is unable to reduce the amount of his garbage, so he pays you for putting his garbage into your bin.
The benefits are that (i) the overall amount of garbage coming from both of you has been reduced because of your endeavours (ii) you are receiving further income by charging your neighbour to put his excess garbage into your bin and (iii) your neighbour is not going to be charged extra because his garbage exceeds the weekly 1 bin collection.
The above, in simple terms, is the genesis of what the ETS is all about. However, to kick start the process (and I reiterate that the previous Liberal government supported this as did Tony Abbott), a Carbon Tax needs to be established as the first stage so as to create a benchmark before to progressing to a full ETS.
Fudd