True Cost Pricing is an essential reform and I applaud the case made for it here. But I worry that Mr De Jong is trying too hard to speak the nonsense spoken by economic rationalists:
“ Every purchase of a toothbrush, a vegetable, an automobile or a factory is an informed economic decision that impacts climate change.”

Currently this is very much not the case, we do not make informed decisions for simple reason that neither pricing nor packaging give sufficient real information about the true production cost (hence the need for TCP). Add the influence of advertising (billions spent obscuring rational choice), repackaging as 'Made in Australia', ignorance of eg. use of slave labour in Chinese manufacturing & West African cocoa production, really there is not informed decision in sight.

Suspect a typo: “Clearly since music lessons, hand tools, bicycles, and seeds do not contribute to climate change so they should not be untaxed.” Meant to be ‘...should not be taxed’?

Wont make the Forum, hope material from it will be available online, tho I see theres already quite a bit at http://www.earthsharing.org.au/

There are some sensible ideas here and there are concerns about global warming, but proposals like this need detail. It is made to sound like a very simple process.

Frank de Jong says just introduce taxes that tax pollution and land use. What if other countries don’t impose these taxes?

Consider a carbon tax that increases the price of Australian aluminium by 10%. If China or Russia or Dubai don’t have a carbon tax, their aluminium will be about 10% cheaper than Australian Aluminium (all else being equal). Australia can impose a tariff on imports of aluminium from non-carbon taxing countries but when China is selling their aluminium to Japan or Korea they may not worry about a carbon tax, so they are more likely to buy their aluminium from China. That will definitely hurt Australia’s Aluminium industry. That will make Australia a poorer country.

Maybe the idea that there would be less income tax and less tax on profits, would mean that the actual cost of the aluminium would less than it is currently. Or maybe not? You would need to get into the numbers to really know?

Australia produces about 550 million tonnes of CO2 per year. The federal budget is about $300 billion. That means that there would have to be a tax of about $500/tonne (50 cents/kg) of CO2. A litre of petrol produces about 2.5 kg of CO2 so there would be an additional cost of $1.25 on petrol. There are already about 50 cents of taxes on petrol, which it is assumed would no longer be needed since this other grand plan is going in, so the cost would go up from say $1.25/litre to $2.00/Litre. If you drive 18,000 km/year and get 9km to the Litre, you buy 2000 Litres of fuel which would cost $4,000. Your taxes for this petrol would be $2,500. That doesn’t seem like enough for the whole government. Electricity would go up too, but not that much.

Does anybody see how these True Cost Pricing ideas would really work?

a charming, reasonable article, i will keep it in my file with "number of angels dancing on pinhead shown to be 12", and "cosmos curvature seems to be flat".

political decisions are made for many reasons, in an order of urgency. the urgency is related to strengthening the hold of the decider on power. this article won't even make the stack, much less come to the top.

Absolutely brilliant idea! After all, slavery was abolished just by making slave traders pay the "true cost" of slaves! The Royal Navy in fact dedicated a squadron in the Atlantic to imposing a Slave Tax.

So much better than the way Sheriff Johnny would abolish slavery, by creating a Slave Market.

If you want stop something, you have to stop it, not tax it, or create a new market for it.

Frank DeJong: great article. Pity our pollies won't sacrifice the aluminium industry.

Liam: Perfectly put. The vast majority of smaller economic actors are very ill-informed these days; market players compete for information and big players obtain advantage through influence over publicly-available information.

ericc: You make two points. The first, "what if other countries don't", is answered nicely by the (highly idealistic) concept of Simultaneous Policy:

http://simpol.org/

Your calculation about CO2 emissions is correct. Only a small part of Australian CO2 comes from consumers' direct fuel and electricity consumption (much of that from flying). Commerce accounts for more CO2 than consumption, so increases in fuel prices feed through to other goods & services.

A huge portion goes to goods which are exported; which is why the Iemma government in NSW made an explicit exemption from electricity price hikes for "trade-exposed industries". *Most* (not all) of these industries could save money and jobs by refitting appropriately to save on fuel and/or electricity consumption -- but they're not likely to do it without a price hike; special low-interest lines of credit would encourage faster reductions.

The biggest single CO2 generator in Australia is aluminium smelting. It uses more electricity than Canberra (I'd love to see a proper figure) and also has direct carbon emissions. This is one reason the resources industry wants nuclear power instead of intermittent renewables, so aluminium smelters can continue to run round-the-clock instead of becoming an 'interruptible load' on nights when there is no wind.

Kyle Aaron: We don't have to *stop* CO2 emissions, just *reduce* them. If we took the greenhouse problem really seriously we would act first and fastest against methane (by forbidding the raising of cattle): a tonne of CH4 is said to be 22 tonnes of "CO2 equivalent" greenhouse gas, but this is calculated over a nominal 100-year period. If we stopped making methane it would disappear much faster than CO2 would (5-10 years vs. 100-200); so over the period where urgent action is required (say, the next 20 years) a tonne of methane might more properly be considered to be 400 tonnes "CO2e".