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The Forum > Article Comments > Are carbon taxes (another) Australian 'magic pudding' policy? > Comments

Are carbon taxes (another) Australian 'magic pudding' policy? : Comments

By Geoff Carmody, published 13/4/2011

Once you've paid the ATO to collect the tax there's not enough left to compensate everyone, and that's just the beginning.

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"Now the CPI increases. All prices increase due to the tax on emissions embedded in all products". This is the key statement in Geoff Carmody's rather complex analysis, which I'm sure is right. Cutting greenhouse emissions must come at a cost to the total economy because the lower-emission technologies are bound to be more expensive than just burning fossil fuels – otherwise global warming would not present a problem at all. And the price of energy appears in every good and service we consume. All economists know this. So when we hear governments and their advisors spruiking policies that redistribute wealth but fail to mention that carbon pricing will harm overall prosperity, we should respond with just two words: 'smoke' and 'mirrors'. The first step towards successful policies for lowering carbon emissions is to accept that prosperity will suffer. And the next step is to choose the energy technologies that will keep that impact to a minimum.
Posted by Tombee, Wednesday, 13 April 2011 9:16:40 AM
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In other words, Julia’s carbon tax is a dog’s breakfast. Agreed.
Posted by BPT, Wednesday, 13 April 2011 9:23:52 AM
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Again I will reiterate, this carbon tax will make few people very wealthy, whilst the rest of us subsidize their income.
Posted by JamesH, Wednesday, 13 April 2011 9:25:49 AM
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Prof S.Fred Singer wrote that the ETS is a scheme to transfer cash from the poor of rich countries to the rich of poor countries.
The Latrobe Valley power generators are preparing to pass the extra tax costs on, plus a % profit. Shareholders will not suffer.
Costs will add on and add on and add on ad infinitum until the GST is added on the end.
The we all suffer.
Posted by phoenix94, Wednesday, 13 April 2011 10:26:02 AM
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"The first step towards successful policies for lowering carbon emissions is to accept that prosperity will suffer."

Correction: the first step is to provide real world evidence that we face catastrophic man-made global warming that lowering carbon emissions can improve, taking into account the positive consequences of any climate change, and the negative consequences of any governmental action, and that does not consist of appeal to absent authority in vested interests which *assume* what is in issue, and then "prove" it by computer models (guesses).

The whole thing is fully 13 layers deep in bullsh!t.
Posted by Peter Hume, Wednesday, 13 April 2011 10:28:51 AM
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The worrying part for the Labor government is, as Geoff points out, that companies will do their best to reduce their tax burden perhaps by installing emissions saving technology.

There will still be a cost which consumers will have to pay, but less tax for the government to redistribute. In other words the carbon tax will cost, and may cost consumers big time, to return for almost certainly no effect on emissions world wide.

No-one else will have anything like a carbon tax, or anything apart from the quite limited emissions trading schemes in Europe, the US and New Zealand, and token efforts (as far as anyone knows) by China.

The carbon tax proposal is pointless nonsense, and there are indications that the voters agree. If Gillard seriously wants to be re-elected she has to dump it.
Posted by Curmudgeon, Wednesday, 13 April 2011 11:24:48 AM
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Geoff, the following is from previous posts. You are not moving forward at all! Just relentlessly banging on.

“Dear Mr. Carmody, there were so many issues raised with you from your last article and so many questions asked. In reading this article it appears that you have failed to even acknowledge the commentary we provided on OLO, let alone answer any key questions.

You were challenged to demonstrate the business/economic principles behind your conclusions. It was also pointed out that without these you have adopted advocacy over economics.

Why might I ask do you solicit comment on OLO then totally ignore our contributions?
Posted by spindoc, Tuesday, 3 August 2010 12:35:06 PM”
Posted by spindoc, Wednesday, 13 April 2011 11:43:49 AM
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Spindoc
sadly I don't recall your no doubt valuable contribution from Geoff's last article so perhaps you'd like to point to one issue in this article which your confronting..

The article would seem to be straight forward. What is your problem with it?
Posted by Curmudgeon, Wednesday, 13 April 2011 1:19:15 PM
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I'm not sure you have this right Geoff, Greg Combet just got through telling everyone at the Press Club in Canberra, that not only would the Carbon Tax be wonderful for the environment, but millions of Australians will be actually financially better off!

Now isn't that good enough for you to get off this negative bandwagon, stop the questioning and get behind this?

You might be one of the lucky ones. (you might too, but the government is not going to reveal who is and isn't going to benefit for as long as possible, so the debate changes from the folly of trying to change the climate, to who gets what .. greedy human nature, and the ALP, who would think they could be so cunning .. oh)

/sarcasm ..

I have never seen such blatant manipulation and spin in my life as this Carbon Tax campaign is dishing up.

Mind you, after this is all over and we throw the lying tricky idiots out, we'll have a golden period where no one will vote for the ALP for a very long time.

They really do think the average joe blow Australian is a fool, i guess after voting them in in all the states for years you have to admit they have a right to think that, but this is just getting beyond the pale.

Next we'll have massive street marches from the "demanders", wanting more tax so they will be even better off (there's something wrong with that isn't there?)
Posted by Amicus, Wednesday, 13 April 2011 2:11:13 PM
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Curmudgeon,

<< sadly I don't recall your no doubt valuable contribution from Geoff's last article so perhaps you'd like to point to one issue in this article which your confronting>>

You don’t need to be sad, or recall it, or place value on it as I just copied it out, there was no reference to “me”, there was reference to unanswered questions from OLO’ers.

The point is that if Geoff Carmody has, as an economist, promoted an economic position, it would be nice if he shared the basis for his conclusions. If the answer is a CO2 Tax, what were the questions and the assumptions?

That Geoff’s article “would seem to be straight forward. What is your problem with it?”

It might seem straight forward to you and those who wish to endlessly debate the “answer”. Some might wish to ask if one of Geoff’s assumptions is CAGW, and we have. Therefore no, it is not straight forward.

Let’s start with the following, and yes please feel free to join in.

“The first step towards successful policies for lowering carbon emissions is to accept that prosperity will suffer." Geoff Carmody.

Question; Why?
Posted by spindoc, Wednesday, 13 April 2011 2:20:37 PM
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Spindoc - oh, okay, my apologies, I may not have grasped your point .. you're saying why should we bother to do all this in the first place?. I thoroughly agree.. although I think Geoff is starting from the point of if we really want to reduce emissions then... but never mind..
Posted by Curmudgeon, Wednesday, 13 April 2011 4:56:10 PM
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OUR BOVINE EMISSIONS TRADING SCHEMERS

Thank you, Peter Hume.

The whole thing is indeed "fully 13 layers deep" in non-aromatic bovine emissions.

Members of the Canberra Carbon Cargo Cult Club (CCCCC) should note
13 also the number of circles in Dante's Lower Hell.

Select a circle here, folks, for your post-carbon (dioxide) tax, post-election vacation: there's one for flatterers and seducers, sorcerers, hypocrites,thieves, deceivers,sowers of discord,falsifiers,carbon con merchants, etc.

Alice (in Warmerland)
Posted by Alice Thermopolis, Wednesday, 13 April 2011 5:25:48 PM
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http://www.helium.com/items/2129635-nasa-admits-all-previous-warming-trends-caused-by-sun Why did the IPCC include not include the Sun as a factor when reaching conclusions about so called AGW?
Posted by Arjay, Thursday, 14 April 2011 6:48:55 AM
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arjay, because it wasn't fashionable, because we weren't to blame if that was the case.

not so long ago there would have been rounds of laughter and derision if you dared mention the sun might have an effect on climate change on OLO, qanda would have sneered professionally down his nose at you, others still might.

there are still warmist and demander sites where they continue to support that notion, and defend it vigorously.

if that were really the case, then that might mean we are not the major cause of the climate changing, and thus taxing us will be ineffective .. can't have that now can we?
Posted by rpg, Thursday, 14 April 2011 7:37:28 AM
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rpg: Did you actually read arjay's link? It contains such gems as:

"Another proverbial nail in the coffin for the AGW theory is the fact that the Earth has been cooling since 2007."

2007? Did they really say 2007?

You say you are an 'engineer'. If you are, then you must have done some statistics, no?

I can't believe an engineer could condone such blatant misrepresentation and distortion - but there you go, another one who thinks global warming means warming every year.

You obviously haven't read the IPCC's AR4 rpg. If you had you would know that not only Arjay is full of it, so is the article he linked to - FUD.

Of course the IPCC factors in the Sun - take a look at chapter 2, or 9 - on attribution and radiative forcing, for starters.

Your support and concurrence for this site's most renown conspiracy theorist tells me more about your credibility than his, rpg.

btw: that is not ad hom - it is fact.
Posted by bonmot, Thursday, 14 April 2011 9:37:46 AM
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No insult intended, but Geoff’s article reminds my of a course I took at uni many years ago ... Symbolic Logic. We spent hours formulating questions like ‘If A then not-B, and if C then not-A, but if D then A or B if and only if C, does not-B imply D’? It was a useful semester ... learned that, when the answer gets that complicated, maybe it’s time to pause for a moment and consider whether or not you’ve asked the right question.

Reducing carbon emissions isn’t fundamentally a taxation problem, or even an economic one. It’s a technological challenge. And technology exists in a Darwin Machine — the successful approach has to out-compete alternative strategies. There’s no way to predict in advance what might evolve, let alone which combination of technological advances will win out. There’s no endpoint, really. The process never stops.

If you really want to reduce emissions, you have to hop into your Darwin Machine, put the pedal to the metal, and let ‘er rip. That’s where economics becomes important. How do you create an environment in which the best technologies, the most innovative researchers, and the canniest investors compete for the opportunity to change the way energy is produced and consumed? In real time, and on a seriously national scale?

Anything’s possible, but I really wonder if a carbon tax lasting 3-5 years before morphing into an ETS is going to drive evolution of new technologies capable of replacing coal, maybe oil as well. Why should investors spend up big in 2012 on R&D that won’t mature before 2025, if they can’t see ahead even to 2014? How can new technologies compete when government subsidises solar photovoltaic & wind by forcing base-load power generators to pay inflated prices for it in the form of feed-in tariffs? What are researchers supposed to investigate, and why?

Gillard’s assumption that higher taxes will drive innovation seems flawed. New tech is expensive, researchers need committed sponsors, and investment is risky. I can’t see how a Carbon Tax will do anything other than stifle innovation..
Posted by donkeygod, Thursday, 14 April 2011 10:44:48 AM
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bonmot, I was having some fun ..

so stop trying to bait me and just let the hate go, people can have different opinions to you and do not have to prove to you why they do
Posted by rpg, Thursday, 14 April 2011 2:07:12 PM
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You don't have to prove anything rpg, your hate has been palpable.

It would have been nice if Arjay did a bit of fact-checking before he posted his "opinion", which in "fun" you endorsed.

You lost credibility for that - but that is just my opinion.
Posted by bonmot, Tuesday, 19 April 2011 8:28:06 PM
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There is a simple and easy mechanism to meet the Copenhagen targets. You may be aware that Australia met its Kyoto targets from one policy and the implementation of the associated legislation. The Beattie Labor Government's Vegetation anti -clearing policy was sufficient to meet the Kyoto targets.
CSIRO studies indicate that plantation forests can effectively offset between 20-60t of CO2 per hectare depending on forest type. I understand that to reduce the emission s by IO% of current levels by 2020 we will need to either reduce emissions or offset emissions by 130Mt of CO2.I understand the enormity of the task has meant that there is only a commitmentto a5% reduction.
lf up to 3Mha of pastoral land was converted to plantation forests assuming an offset of 40t COZ/ha this would equate to an offset of 120Mt CO2 each year for 40 years, after that time the forests reach saturation point and can no longer absorb CO2.
3Mha represents 0.75% of pastoral land in Australia. Plantation establishment costs range between $1500-$2500per ha. The total cost for establishing carbon sinks through plantations is S7.5 billion dollars. lf a program was enacted over 5 years this would be an annual cost of S1.5 billion'
lf the coal generating power stations were to fund this, it could be funded by a levy of 0.84 cents/kwhr. For someone like myself this would be an increase in my power bill of $77 .26/yr. Based on the weighted average of power produced by coal sources in the Australian market (72%)lf we were to replace brown coal with gas we would reduce emissions by 35.25Mt CO2/yr, at a cost of S4.93Billion,
representing a cost of $140/t of CO2, if we were to replace brown coal with Solar Thermal we would reduce emissions by 56.4Mt CO2/yrat a cost of $32.9Billion, representing a cost of $581/t of CO2.
Posted by slasher, Wednesday, 20 April 2011 6:15:32 AM
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