Carbon Tax Pros and Cons

By Eco Guy 10:18am 10th August 2011
We look at the Pros and Cons of the Carbon Tax...

Carbon Tax Pros and Cons

The Carbon Tax in Australia is probably the most contentious bit of environmentally related legislation in many a year. It has probably caused one of the biggest environmental discussions in this country. We look at the various pros and cons of this Tax and give judgment.

The Environmental Impact

The carbon tax has definitely raised the public awareness of environmental issues for sure; the wall to wall coverage of the Tax and associated climate change issues has been pretty much relentless since this tax was drafted.

The trouble is a lot of what is being said does not really show a link between enacting the Carbon Tax and actually improving the general environment in Australia. There seems to be a lot of fluffy statements and hand waving; maybe because its a complex subject to communicate, but there is a sure absence of hard facts on the direct benefits. For instance it is understood that the Carbon Tax is primarily designed to help deal with global warming, yet none of the documentation provided by the government actually say what the temperature reduction would be - it has been estimated that the tax will only result in a reduction of 0.0007 degrees; this is a change so small that cannot be measured in the environment.

So what about other environmental impacts? The Carbon Tax does not actually do anything directly to reduce 'genuine' sources of pollution - such as industrial process pollution, fertilizer run off, etc. Also it won't do anything to effect sea levels, as sea levels have been increasing at largely constant rate for 200 years anyways, well before man made Co2 came along.

The financial Impact

A major component of the Carbon Tax is to transfer most of the money raised through the tax directly to those who will be worst effected by the rise in prices as they come through. Now on the face of it this sounds like a good idea, but if you think about it, if the majority of people do not experience a market signal to change their behavior there is no reason for them to change...  So they will keep consuming the same services and products which in turn produce the same Co2 pollution.. The net effect is that more money ends up flowing through the government whilst for the consumers there is no net change. Now for those who are not compensated, due to their level of income, yes, things will become more expensive and yes they will change their behavior. The trouble is they would probably first cut back on none essential expenditures first, in effect a belt tightening, which if done by many families will have a negative impact on the economy...

Now what about the money which is to go towards R&D? The paperwork says around about 10% of the money raised will be spent on R&D - the trouble is this is money without a 'driver' as such, let me explain. R&D done by businesses using money they raise is often very results orientated, they expect to get a marketable return for the investment. R&D money from government is often given as a grant to a business, in essence there is not such a requirement to deliver as the business didn't have to raise the government money, they got given it.

Now the R&D could well generate benefits; the trouble is even if it does, what market do they have to sell it into? Remember the Carbon Tax will result in a likely tightening of discretionary expenditure by individuals and businesses - in effect the very people who could buy such new leading edge tech will not be in a position to do so. Combine this with the current global economic climate and it will be very difficult indeed to take a new green tech to market and actually get somewhere.

There is also what economists term the 'opportunity cost' to be considered, i.e. in instead of spending X on something what else of benefit could be done instead. So it should be reasonable to ask what could we do instead of spending many billions through the Carbon Tax? Now I know the majority of the money is coming from the polluters, but assuming it could be used in other ways what could you do instead? How about:
  • Modernization of trains and public transport to make commuting a much more enjoyable and reliable experience for more people;
  • Refocus manufacturing standards so give more emphasis to designing for efficiency, reuse and reliability;
  • More research and support around sustainable farming practices.

What about the Carbon Pollution?

The main backbone of the Carbon Tax is to charge the top 400 polluters in our economy. Most of these are associated with electricity generation by the burning of coal, yet the plants they are using to burn this coal are very old. Newer generation coal burners produce more energy with dramatically less Co2 production by up to 30%. This would be a dramatically higher reduction in Co2 then the whole Carbon Tax would deliver, yet you do not hear about this option anywhere in the news...

So what is this Carbon Tax really about?

The Carbon tax is actually about a minority government doing anything necessary to stay in power by adopting policies of the Greens that in a majority government would never see the light of day.

The Greens policies, when put to the acid test, often fails on the grounds of practicality. They often view any industry as an 'evil' to be stamped out, yet it is quite possible by logical reasoning and analysis to end up with a result that benefits both the people and the environment, as the modernization of the power stations above shows.

For us, this Carbon Tax is not really going to do anything productive for the environment or the people; which is a real shame. This site is here to promote positive and logical environmental thinking, to us the Carbon Tax is the absolute anathema of our point of view, it stands for everything wrong in environmental legislation. So much more could be done for man and the planet with some proper logical thinking; what a waste.

Related posts

Want to learn more about this issue?

Related Content Tags: carbon tax, environment, climate change, global warming, australia

0 star(0.00 out of 5) from 0 ratings. Rate Now!
Stars: 0 1 2 3 4 5 

Follow us on Facebook, click here!

Comments left

  • Rob B said:

    I don't undertstand this quote: "if the majority of people do not experience a market signal to change their behavior there is no reason for them to change... " Compensation means that if people don't move to alternatives they won't be too much worse off. However if they DO move to alternatives, they can be better off. The tax makes the existing alternatives comparatively cheaper, and should encourage other alternatives to be created. In effect the tax encourages those people who are compensated via a potential saving (of using lower-carbon-impact alternatives). This is likely a softer motivation to change, but it is still a motivation. It is also much more politically saleable, and there is no benefit in putting up models that no-one will accept.

    ON Mon, 15 Aug 11, 11:25pm probably from Australia  Reply to this comment

    • Eco Guy said:

      Hi Rob,

      yes, what you say is true only if there exists an alternative - the trouble is people on a low income spend most of their income on food, followed by transport and housing. See my link for the ABS report on household expenditure. Given food doesn't get effected by the Carbon Tax in a positive way; petrol is excluded and housing is a static cost outside of the cycles the Carbon Tax - I think my statement is fair. See where domestic fuel and power costs come in the chart, 3rd to bottom...

      Yes, there will be some change, but not as much as I think we are being led to believe - the big expenditure items are essentially untouched by the tax in a positive way.

      ON Tue, 16 Aug 11, 1:41am probably from United States  Reply to this comment

  • Ian said:

    I agree with sustainable living but what Labor have put forward has ZERO to do with reduction of Carbon/CO2 or living with a small environmental footprint. It's a load of Political penalty & is more about stupidity by a Rat-bag Gov who have no clue what being Green is about. It should be binned & we should start again with a Roundtable discussion only with Liberal, Independents, NGO's etc. The Labor/Julia/Bob plan is going to lead to Riots! How is that going to look leading into Rio 2012?

    ON Thu, 18 Aug 11, 12:58pm probably from Australia  Reply to this comment

  • Max Ingram said:

    you are all idiots... the carbon tax isnt even a proper tax its more of a fine to give the people some insentive to think about what they have done the carbon tax is a great idea look at some of the countires in europe they ar running 80% of they energy from geothermal,wind,hydro and solar so think about what its achieving i agree with the matter as they are doing it the wrong way as to appose how they should do it i am only fifteen but my pupils and myself shouldnt be the ones to clean up the mess from the genertaion before us..

    ON Wed, 2 Nov 11, 11:17pm probably from Australia  Reply to this comment

    • Eco Guy said:

      Max, exactly what mess are you referring to? The last ten years the temperature globally has stabilized, yet a quarter of all human Co2 since 1751 has been emitted in that time. also the 'hot spot' in the atmosphere that the models say should be there at the equator due to human co2 is clearly not present. The IPCC for each successive report has downgraded the rate of temperature change because their models keep overshooting what is happening in reality...

      I agree caring about the environment is very important - but the environment now, compared to what it was 50 years ago, is much much better. The only real signs of persistent environmental degradation is occurring in Asia - specifically China. About a third of their coastline is so polluted that fishing is banned. Guess where the majority of solar panels and wind turbines are built?

      Also which countries in Europe are running at 80%? I know in Europe that Spain has drastically cut back green subsidies and it looks like the UK is about to do the same....

      ON Thu, 3 Nov 11, 2:53am probably from Australia  Reply to this comment

  • Robert Bonello said:

    so let me try and understand this carbon tax i go to fill my car with petrol who pays me the $10 dollar rebate the this pathetic goverment has offerded il give you the answer its myself through our taxes its a carbon dixode tax alot of pain for not much gain what a waste of tax payers money bring on this election soon please.

    ON Tue, 27 Mar 12, 10:10pm probably from Australia  Reply to this comment

    • Eco Guy said:

      Hi Robert, I agree with you - the Carbon Tax does nothing for the environment and just acts as one big circular wealth transference device with the government directing the money go round.

      BTW In Queensland the new government has just announced a massive roll back on Green schemes - given the amount of overhead and ill advised policies these schemes encompass - I fully support the move.

      ON Wed, 28 Mar 12, 4:38am probably from Australia  Reply to this comment

  • Kristen said:

    This is meant to be an article of pros and cons.I hope all those who read this have enough education to understand what a 'preferred reading' is and immediately identify this article as one. What an atrocious attempt at journalism.

    ON Thu, 3 May 12, 8:31am probably from Australia  Reply to this comment

    • Eco Guy said:

      Kristen, just look at the article rating 3.57 based on 151 votes. Hardly an indication that people think the article is 'an atrocious attempt at journalism'.

      Also what exactly in it has not come to pass since it has been written? All our solar cell manufacturers have LEFT Australia - we have no real manufacturing base for this, especially when compared against the cost base of what is available from China. Heck, even China are now focussing on nuclear and hydro power instead of 'ineffective' solar and wind...

      I suggest you focus on keeping up with the news and then comment.

      ON Thu, 3 May 12, 9:16pm probably from Australia  Reply to this comment

  • Sam said:

    Just bloody kill julia and her corepresenters of the carbon tax, problem solved.

    ON Mon, 7 May 12, 2:33pm probably from Australia  Reply to this comment

Add Coment

Got a question or comment about this?

Find what you were looking for?.. Not quite what you expected?.. Got a question to ask people?
Share your thoughts and use the form below to post a public comment right on this page.

Simple HTML is supported i.e <b> <i> etc. Excessive inline URL's, spam, ANY ads or swearing is blocked/removed quickly. youtube URL's get embedded.

Posting Terms & Conditions