The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
The Forum - On Line Opinion's article discussion area



Syndicate
RSS/XML


RSS 2.0

Main Articles General

Sign In      Register

The Forum > Article Comments > The ultimate compliance cost for the ETS > Comments

The ultimate compliance cost for the ETS : Comments

By Peter Lang, published 7/5/2012

Does anyone know what the real cost if implementing the ETS will be?

  1. Pages:
  2. Page 1
  3. 2
  4. 3
  5. 4
  6. ...
  7. 7
  8. 8
  9. 9
  10. All
I would distinguish between administrative compliance costs, uncertain measurements and ambiguous deductions. For the carbon tax it appears the regulator has eyeballed the initial 400-500 liable entities. Presumably measurement of gross emissions is under control. I expect problems will arise in what deductions to allow in calculating net emissions. Whether this happens in the early years of carbon tax is not clear but will definitely be a problem if/when we move to an ETS in 2015.

1st example; in WA a prominent mining company sponsors tree planting. What if the trees succumb to dieback, drought or fire?
2nd example; an east coast steelworks implements a furnace heat recovery system. Should the equivalent fuel saving be counted as a CO2 deduction?

These kind of issues remind us of the GST on a cake. Hordes of assessors will be needed to interpret the rules which will no doubt be continually modified by lobbying and appeals. Oddly the EU trading scheme disallows tree planting offsets but has the troubling 'clean development' offsets which are the difference between actual emissions and a presumed entitlement. Some analysts claim up to 40% of these offsets are fraudulent. Australia is copying the EU model. Not only that we are supposed to be spending billions in 2015 paying Indonesia to preserve its forests as a fix for Australian CO2. Seems the Indos can't preserve their own forests.

The Carbon Farming Initiative appears to be a rural pork barrel like the ethanol blending quota is for US corn farmers. In either case any benefit is probably illusory. Will carbon farmers hand back the cash if drought re-releases the carbon? I think we must assume for now the gross emissions measurements problem is solved but we must be vigilant against wasteful and illusory pursuit of offsets.
Posted by Taswegian, Monday, 7 May 2012 9:39:32 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
The increased numbers of public servants should make Julia very happy - that was in fact the true reason for having the carbon tax (to later become ETS) in the first place. Nevermind, by or around 2015 the states would have seceded from the commonwealth and Julia can then implement the ETS in Canberra to solve the unemployment there.
Posted by Yuyutsu, Monday, 7 May 2012 10:00:52 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
I find myself agreeing with Taswegian (we often disagree).

Two things seem to me patently obvious: (i) the ETS is going to have no discernible effect at all on GHG, and (ii) we are going to have a lot more 'regulators', and after them, lawyers who will dispute what the regulators say.

As I've said elsewhere, we lead the world in regulators and regulation. If only that were positively correlated with an improvement in everyone's standard of living!
Posted by Don Aitkin, Monday, 7 May 2012 10:56:35 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
The ultimate cost of a carbon trading scheme, the operative word being scheme, will have to raise around $63.00 a ton, to impose a net $23.00 a ton on actual emissions? The rest being a combination of compliance costs, as much as 11% of the bottom line, brokerage fees, cascading costs; and, the shared cost of fraudulent claims; and or, the cost of effectively policing and subsequently prosecuting them?
The cost of generating coal-fired power is 3 cents per kilowatt hour? Transmission line losses, 50%, doubles that cost, about 6 cents per kilowatt hour, plus generators' profits, 100% or around an additional 3cents per kilowatt hour? Making the wholesale cost 9 cents per kilowatt hour.
Selling that power to households involves nothing more than paper shuffling and around 2.5% administration costs, tops. The addition of computers and field operated mobile computer links eliminates at least half that cost to less than 1 cent per kilowatt hour, or a total cost of around 10 cents per kilowatt hour? A number which can be described as the so-called natural cost?
Off peak power, reticulated at around 11 cents per hour, still produces a 10% profit, and peak hour, charges, of around 15 cents per kilowatt hour provides a 50% profit margin for little more than meter reading and shuffling paper? The wholesaler, being responsible for everything up to the nearest transformer or the meter box?
Add to that mix the cost of privatisation, and the servicing of multi billion dollar loans, interest only at commercial rates and shareholders'dividends?
The costs, to the average mug householder can double and double again over a period as small as 3 years?
A carbon tax will simply allow the big polluters to pass on their costs to a captive market, who will respond by energy efficiency and reduced use to an absolute minimum?
Anything less will require the consumer to move into a cave, or a wikkiup, keep all outdoor activities to between dawn and dusk, run all your food down with a stone on a stick and cook it all over an open fire! Rhrosty.
Posted by Rhrosty, Monday, 7 May 2012 11:08:11 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
I would like a referendum on just how we address Co2 emission? Let's assume we can all agree that the Co2 emission needs to be reduced, simply to reverse the acidification of our oceans, which produce around two thirds of the very oxygen we all need to simply live; and, are often described as the lungs of the planet.
The referendum could simply ask if we wanted all the additional complexity of an ETS; or, a much simpler vastly less costly to the end user/consumer, carbon tax?
Or, would you prefer a completely reformed tax system, as would exist by replacing all that convoluted complexity, with a single stand alone expenditure tax, that could also include a carbon component, which would impose an annual price of around 100 billion per on all carbon emission, and ensure those with the largest carbon footprint, paid the most.
The additional funds could be ploughed straight back as carbon free/neutral energy projects; that actually reduced energy costs to the consumer!
Who would then want to stay with the more expensive old carbon producing energy options? Well?
Imagine even as we imposed the new stand alone expenditure tax, inclusive of a genuine carbon component; nonetheless, it still allowed business to improve the gross pre-tax bottom line, by around 7%, and the accompanying repeal of all the other taxes, adding around 30% to Australian based business and around 25% to most households.
This would be what we would gain from the massive simplification of our tax collection system along with the accompanying rejection/removal of all those unproductive parasites, who accrue income from their entirely unproductive parasitical tax avoidance/minimisation practises?
All very doable with today's' or modernised versions of yesterday's technology. Rhrosty.
Posted by Rhrosty, Monday, 7 May 2012 11:42:05 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
For most taxes it is possible to find calculations about their efficiency - that is, how much of every dollar raised has to be spent on administration both by government collecting the tax and the companies paying it. One of the reasons it hasn't been done for the carbon tax is probably because its a completely unknown area.

But please note companies affected by this tax are already required to calculate and report their emissions - in other words they are already paying what is likely to be the bulk of the cost of administering this nonsense.

Whichever way you cut it, and no matter who pays the cost, the tax is a monumental policy blunder..
Posted by Curmudgeon, Monday, 7 May 2012 11:54:16 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
  1. Pages:
  2. Page 1
  3. 2
  4. 3
  5. 4
  6. ...
  7. 7
  8. 8
  9. 9
  10. All

About Us :: Search :: Discuss :: Feedback :: Legals :: Privacy