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Apr 5, 2011

Gillard’s pointless carbon tax.

There are a lot of figures being bandied around at the moment, but there two that do not seem to change. The first is that Australia produces around 1.5% of the world’s human CO2 emissions. The second is the Gillard government’s target of reducing this by 5% by 2020.

This in effect means that the intention is to take away one twentieth of that 1.5% or 0.075% of world emissions, leaving us with 1.425% of the total that the whole population of the Earth emits.

Recent releases under FOI although censored indicate that at the proposed price, this will cost the average household in the order of $865 per year. Lets not forget here that the tax is to escalate on an annual basis until the introduction of a ration and tax scheme, (RATS) in the future. It hardly seems worthwhile.

One of the serious issues to deal with here is the fact that Labor will be relying on the Greens to get this legislation through parliament. The Greens as it happens want a much bigger target, at least in the order of 20% in exchange for their approval. This means at least one of three possible scenarios.

The first, is a much higher target which will require a much higher tax than what is mooted here. The second, is legislation that will establish the tax at the rate mooted with the approval of the Greens in exchange for an open ended bill that will allow for the increases the Greens want, which can be done by regulation without an act of parliament.

The third would be to drop the bill altogether, but with the amount of political capital invested in it this is not really an option. There is a possible fourth which would be to create the circumstances for a double dissolution and take it to the electorate, which is unlikely as Gillard is not politically suicidal.

It is difficult to ascertain what figure would need to be taxed to attain a 20% drop in emissions. It would probably be lower than the $865 x 4, or $3,460 per household per year as some added resistance to power use would kick in at a lower figure. It would still be quite high, possibly in the order of $2,500 - $2,800 per year.

20% of 1.5 is 0.30%, which would still leave us with 1.2% of world emissions. It hardly needs pointing out that apart from the incredible hardship this would impose on the population just from the tax alone, it would be exacerbated by the closure of many businesses and the destruction of export industries on which many of us rely for employment.

While we are pursuing our pyrrhic victory over the dreaded carbon, our neighbours, China and India will each be increasing their own emissions by several times our cuts per year.

On a positive note, the Treasurer, Wayne Swan has assured us that those figures from the FOI are not real and that it was just a position paper. As they pretty much agree with the estimates that have been circulating for some time, I am fairly sceptical of this claim.

Wayne is not the sort of guy I would buy a used car off.

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