Good article Tom. Yes peak oil (and gas!) has always been the other big reason for my supporting a carbon consumption tax.

"At the heart of the ETS is the aim to pre-empt such a crisis by making carbon (and therefore, fossil fuel use) more expensive and therefore less desirable now, while there is still an energy surplus to buffer the effect; and it is designed to hurt". You put it in a nutshell.

Those nations who aren't well on the way to bringing in a renewable low carbon economy in an ordered way by about 10 years time will be hit suddenly and unprepared by a 'triple whammy' of crises:
1/ Climate disasters that will cost more than the cost of cleaning up their economies (we are already getting close to that with regular bush fires and floods and droughts in both hemispheres costing billions). Soon the world will be FORCED to act and it will be very hard for the laggards.
2/ Rising costs of oil and gas as they become harder to extract (the current CSG glut is temporary).
3/ Worsening pollution from fracking, deep oil well spills, tar sands and coal to liquids.

You can keep your head in the sand Peter Lang; maybe you and your ilk will be dead when the consequences hit but your grandchildren will suffer along with the rest.

Please tell me, if the objective of the carbon tax is to increase the cost of carbon fuels (and products) to discourage a carbon based living style and encourage alternate behavious, how come people are being compensated for the increases in the cost of living brought about by these actions? Does this not defeat the stated objective of the whole exercise?

Alfred
Good question but I believe the main rationale is to get the utilities to switch to cleaner fuels and/or production. But at grassroots level, some may choose to turn off the heaters, put on a jumper and pay for their children's violin lessons with the compensation cheque from the Government.

popnperish,

My apologies if I didn’t make my point clearly enough. The point I was making is that CO2 tax and ETS has never been justified on the basis of threats to energy security and running out of fossil fuels – e.g. ‘peak oil’ issue. It has always been about the threat of dangerous or catastrophic man made global warming.

However, the real costs and the lack of benefits are not being admitted by the government. “What the Carbon Tax and ETS will really cost” http://jennifermarohasy.com/2012/06/what-the-carbon-tax-and-ets-will-really-cost-peter-lang/ explains what the real costs to Australia will be from now to 2050. The costs amount to roughly $13,000 each for every man, woman and child, $26,000 for every working person. But it’s much worse than that if the modeller’s (unrealistic) assumptions are not realised. Some of these are:

• Negligible leakage (of emissions between countries)
• All emission sources are included (all countries and all emissions in each country)
• Negligible compliance cost
• Negligible fraud
• An optimal carbon price
• The whole world implements the optimal carbon price in unison
• The whole world acts in unison to increase the optimal carbon price periodically
• The whole world continues to maintain the carbon price at the optimal level for all of this century (and thereafter)

If these assumptions are not met, the benefits cannot be achieved.

The post linked above explains:
• the benefit (total to 2050)
• the cost (total to 2050)
• the benefit to cost ratio
• the cost per capita and per worker

Supply and demand set the price of most things, except maybe, energy and capital. We made an ultra-serious mistake, when we allowed private enterprise to get its grubby greedy hands on either?
Don't get me wrong, I'm all for private entrepreneurial enterprise. I just don't believe it should be allowed to interact with the very pillars that support every western style economy!
A very large part of the oil price is controlled by the spot market and international cartels, with budgets larger than many sovereign nations, speculating the price up to double or triple normal demand would decide?
Clearly cap and trade is being manipulated in a similar way. I mean, there is around 140 billions in brokerage fees beckoning, and if we continue down the cap and trade road, we could wind up with carbon becoming the most valuable tradeable commodity in the world?
Not because it's necessarily inherently valuable, but because twiddle dumb and twaddle dumber have made it so, with really dumb policy?
If we were genuinely concerned about carbon emission, we would deal the money making paper shuffling brokerage firms out of the equation; and simply put in place, a sliding downward cap, and only tax the carbon component above that cap, with an upward sliding scale tax!
This model would give energy suppliers far more powerful and extremely cogent reasons to reduce carbon outputs or offset it, with say, nearby carbon absorbing algae farming, which apart from absorbing carbon outputs, would provide additional revenue streams, from the virtual child's play extraction of the oil in algae as ready to use bio-diesel.
Some algae are up to 60% oil and absorb 2.5 times their own weight in Co2 emission; and, double that same bodyweight every 24 hours under optimised conditions.
The "market" created the Great Depression, the more recent GFC and a thoroughly corrupted ETS.
One of the things management teaches, is there is always a better way.
Sure, lets put a price on carbon, but let the rewards flow to those that actually reduce their emission; rather than, money for bugger all brokerage firms?
Rhrosty.

<< The ETS and ‘Carbon’ taxes have never been about peak oil.>>

I believe you are right, Peter Lang. It would seem that the carbon tax is entirely about climate change. That is; Gillard’s (Labor’s and the Greens’) motivation for introducing it.

Of course, the primary motivation should be peak oil, but this appears to be entirely inadvertent.

Could someone please explain why this is so.

It seems to me that the whole thing would have been very much more acceptable to the general populace and hence much more politically tenable if it was promoted on this basis of the looming threat of the peak oil energy crunch rather than climate change.

In fact, it would have been eminently sensible to have promoted it entirely on this basis, with climate being left virtually unmentioned!