Death of Australian Pollution Levy

[kochman]

http://www.bloomberg.com/news/2014-...ution-levy-marks-first-u-turn-on-climate.html

Without naming names, I know some Aussies here were extremely glib about having this originally passed into law... and now it has passed out of law.

Discuss...

 

[Kaitzilla]

Abbott won a landslide election victory last year for his Liberal-National coalition that he said gave him a mandate to throw out the “toxic tax” on carbon, which was triple Europe’s carbon price. The government estimates the repeal will save the average family A$550 a year in lower electricity prices and make Australian companies more competitive.

I know Australia has been struggling with electricity prices that have more than doubled in recent years.

Over on the War on Coal thread Arwon made a very good post that talked about the issue.

 

[kochman]

I know Australia has been struggling with electricity prices that have more than doubled in recent years.

Over on the War on Coal thread Arwon made a very good post that talked about the issue.

Well, sure, that was part of the deal from the get go though, wasn't it?

Hell, our prices go up and we don't even do these things in the US.

 

[classical_hero]

Link to video.

 

[El_Machinae]

To replace the carbon price, Abbott has put aside $A2.6 billion for a new program known as Direct Action to reward companies that volunteer to reduce their emissions.

2.6 billion / 22.68 million Australians ~ $10 per person. Ugh.

What idiocy, dollars to donuts, it's insufficient to enact sufficient change.

 

[Camikaze]

I like that the current Environment Minister wrote his thesis on why a carbon tax would be an awesome idea.

This is taking a step back in climate change action, pure and simple. Abbott famously doesn't really believe in it (though has had to avoid completely anti-science statements since becoming leader of the Liberals), and his mining friends certainly aren't fans either. His alternative has been pretty much universally derided.

On the other hand, I suppose this is the first election promise he's actually kept.

 

[dutchfire]

2.6 billion / 22.68 million Australians ~ $10 per person. Ugh.

What idiocy, dollars to donuts, it's insufficient to enact sufficient change.

$100 per person?

 

[Bootstoots]

I do hope that nobody was seriously thinking that substantial carbon taxes would last very long in a rich country with very high per-capita carbon emissions. Some European countries do pull off non-trivial carbon taxes at least for now, but their energy consumption is far lower than that of the three biggest per-capita carbon emitters that aren't petrostates: the USA, Canada*, and Australia. It's no coincidence that these are the countries where climate change denial is most common.

*now sort of a petrostate

 

[Hakim]

Surely there are more taxes weighing on Australian companies. Unless the government is out to save specific industries I can't see why carbon tax must be the one to lower/abolish.

 

[PieceOfMind]

I do hope that nobody was seriously thinking that substantial carbon taxes would last very long in a rich country with very high per-capita carbon emissions. Some European countries do pull off non-trivial carbon taxes at least for now, but their energy consumption is far lower than that of the three biggest per-capita carbon emitters that aren't petrostates: the USA, Canada*, and Australia. It's no coincidence that these are the countries where climate change denial is most common.

*now sort of a petrostate

I'd be willing to bet climate change denial would vary by season too, or climate change acceptance depending on how you view it. For instance it may be no coincidence that the carbon tax repeal just managed to get through right in the middle of winter with little public dissent (from the conservative side at least). If we're going to see El Nino hit somewhere in the next couple of years and we start hitting more temp records, have a few more catastrophic bushfires etc. then I think momentum for change will slowly build again.

I must say it will be interesting to see later this year how the prime minister goes with trying to keep climate change off the G20 agenda considering it's arguably the most important economic issue facing the globe.

 

[Masada]

Ceterum censeo Liberal Partium esse delendam

I like that the current Environment Minister wrote his thesis on why a carbon tax would be an awesome idea.

Oh, hell.

 

[kramerfan86]

I personally dont think the best path to fighting climate change is punitive measures against average joe, only going to create blowback. I think carrots are a better path than sticks.

 

[Arwon]

Surely there are more taxes weighing on Australian companies. Unless the government is out to save specific industries I can't see why carbon tax must be the one to lower/abolish.

It's pure stupid politics, therés no policy-based reason for this move. We're not a sensible polity right now.

I personally dont think the best path to fighting climate change is punitive measures against average joe, only going to create blowback. I think carrots are a better path than sticks.

The carbon price was coupled with counterbalancing tax cuts and welfare increases for precisely this purpose. The goal was never to be "punitive" to individuals but to change the relative competitiveness of different industrial activities.

I like that the current Environment Minister wrote his thesis on why a carbon tax would be an awesome idea.

This is taking a step back in climate change action, pure and simple. Abbott famously doesn't really believe in it (though has had to avoid completely anti-science statements since becoming leader of the Liberals), and his mining friends certainly aren't fans either. His alternative has been pretty much universally derided.

On the other hand, I suppose this is the first election promise he's actually kept.

Not just that but the previous conservative (Liberal) Prime Minister John Howard also proposed a carbon price pretty much exactly seven years ago.

And then when an emissions trading scheme was proposed in 2009, Abbott said f you want to put a price on carbon why not just do it with a simple tax."

It's sheer self-obsessed madness, going against the consensus of not just science but economists too.

 

[kramerfan86]

So why bother then? Why not directly subsidize and pay for the change you want rather than hoping market forces cause the change while you turn around and help absorb the blow those market forces create on people? Seems like a pointless middle man.

 

[Arwon]

So why bother then? Why not directly subsidize and pay for the change you want rather than hoping market forces cause the change while you turn around and help absorb the blow those market forces create on people? Seems like a pointless middle man.

False dichotomy. Direct measures have their place, but will usually target just specific big ticket things because of the nature of public policy. Carbon prices are pretty widely recognised as the lowest cost and most efficient way to restructure economies towards less carbon emissions.

The thing with carbon prices is they operate as a constant firm background pressure systematically favouring every lower carbon activity against its higher emitting competitor. Electric arc steel furnaces over blast furnaces for steel production. Lower emissions electricity generation over higher emissions electricity generation. Newer and lower emitting aluminium or petroleum refineries over older ones. Manufacturing designs that use less materials rather than more. And so forth. That's broader ranging than just the specific big things a government may pick to regulate about.

 

[kochman]

So why bother then? Why not directly subsidize and pay for the change you want rather than hoping market forces cause the change while you turn around and help absorb the blow those market forces create on people? Seems like a pointless middle man.

Well, you're punishing the "over" use of power. With other tax cuts in place, the idea is that higher takes on power will lead to the individual/corporation/etc reducing energy consumption in order to FURTHER lower taxes... and of course, save the world.

 

[kramerfan86]

Lets be frank, that sounds nice, but at the end of the day your average corporation is simply going to pass cost to consumers whether its electrical or product. That's the path of least resistance for them, to me direct action doesnt allow them to take that path of least resistance, but that's just me.

 

[kochman]

Lets be frank, that sounds nice, but at the end of the day your average corporation is simply going to pass cost to consumers whether its electrical or product. That's the path of least resistance for them, to me direct action doesnt allow them to take that path of least resistance, but that's just me.

Therein lay the rub.
How to tax corporations without them passing it on to consumers or putting them all out of business...

 

[El_Machinae]

So why bother then? Why not directly subsidize and pay for the change you want rather than hoping market forces cause the change while you turn around and help absorb the blow those market forces create on people? Seems like a pointless middle man.

Fair enough, but then it's a question of where to get sufficient money to incentivise meaningful change.

 

[Arwon]

Lets be frank, that sounds nice, but at the end of the day your average corporation is simply going to pass cost to consumers whether its electrical or product. That's the path of least resistance for them, to me direct action doesnt allow them to take that path of least resistance, but that's just me.

In a competitive market it's really difficult to do that and succeed, especially when activities and companies are impacted unevenly.

Sure they can try to pass it all on by raising prices. That's their prerogative. Meanwhile, their competitors which are in lower carbon activities don't *have* new costs to pass on. So become relatively cheaper and more successful. "Companies will pass on the cost" isn't an argument because in doing so those companies still bear the impact.

Which is why the carbon price in Australia influenced the electricity generation market towards lower carbon participants, for instance.