Big change or a lot of hot air?

Fantastic article, which seems to have mastered the art of explaining the carbon tax, the politics of business and parties that surrounds it, with a good dose of moral argument thrown in. Best thing is, it does so very clearly, with comparisons and examples that help take some of the complexity out of explaining seemingly dry financial schemes like this.

Definitely worth a read, especially if you’re still curious as to what impact this scheme will have as it gears up for implementation next year.

(Richard Denniss)

Australia is now one of the wealthiest countries in the world living at the wealthiest point in world history. In turn, our greenhouse gas emissions are among the highest in the world. If we, as a nation, believe that we cannot afford to do more to tackle climate change then it is virtually inconceivable that anyone else in the world could either.

The problem is, the climate scientists assure us that we cannot afford not to drastically reduce our emissions.

Someone is completely wrong, and I don’t think it is the climate scientists.

Forbes: 'The Australian Carbon Tax: Finally, Someone Gets it Right!'

The Australian Carbon Tax: Finally, Someone Gets it Right!

7 comments, 0 called-out + Comment now Tim Worstall

Hurrah, finally someone has managed to get a carbon tax to beat climate change right. Yes, it’s the Australians, with their new carbon tax that have got it right. The important point is this one:

The tax-free threshold for wage and salary earners to rise from A$6,000 a year to A$18,200 from July 1, 2012, and to A$19,400 from July 1, 2015.

Having written an entire book on just this subject of course I’m cheering this move.

The economics of this is just right. OK, well, if you think that climate change isn’t happening, we’re not causing it and that we shouldn’t do anything about it, sure, you’ll not be all that impressed. However, if you do think that all of those three things are true then this is the first such tax that has got things right.

We’ve an externality, something that is external to the market prices that we use to make decisions. The answer to this is to internalise the whatever it is into market prices. This means a Pigou Tax and that’s just what the carbon tax is.

Good, so we’re correct there. However, there’s no reason at all that fighting climate change means a higher level of taxes in general. Sure, we might want higher (or even lower) total taxes for all sorts of other reasons but fighting climate change isn’t one of them. So, we’ve got this extra money coming in because we’re taxing carbon emissions: but we don’t want to raise the general level of taxation. So, of course, we should lower some other tax.

Which is exactly what Australia has done. And they’ve lowered the best tax to lower: income tax on the incomes of the poor. So, now we’re taxing bads (emissions) and lowering taxes on goods (the incomes of poor people).

All of which is just excellent and what most economists have been saying everyone should be doing for the past decade or more. The problem this reveals of course is that only one country has in fact done what economists have been recommending.

*The other problem is that even our own politicians can’t get this relatively easy political sell across. But at least it’s through! (Unless the devil really does respond to Tony’s ‘pledge in blood’ to repeal it, but that seems unlikely)

Environment groups challenge new power plant

Dr Eugenie Kayak says the Doctors for the Environment are objecting to the project on health grounds.

(… BUT)

The company HRL-Dual Gas says environmental groups have no right to challenge the project.

The company’s lawyer has told the hearing the actions of environment groups should be struck out because they do not have physical or financial interests in the project and emotional interests were not enough.

Yeah, because the health of local residents is just an ‘emotional’ problem. And it’s not like the power plant will affect anyone who’s not a shareholder. Because the environment respects arbitrary boundaries like that, you know?

The most ----------* man in Australia

Great article (even just for the pic of Bob Brown in his natural habitat. I approve.)

By any reckoning his has been a remarkable life. He was born a twin, the shy son of a country policeman, who went to university to become a doctor. He moved to Tasmania in a mad search for the thylacine. As a 32-year-old doctor in conservative rural Tasmania, way back in 1976, when even Elton John had girlfriends, he publicly declared his homosexuality so others might be spared his “years of misery”. He turned his back on a medical career to lead the seven-year campaign to save the Franklin River from being dammed. He was the driving force behind The Wilderness Society. He transformed the Tasmanian Greens, and then the Australian Greens, into an electoral power and has fostered new Green parties around the world. Along the way he has been bashed with a tyre lever, shot at and jailed. In 1990, he won a $50,000 environment prize and donated the money to save a patch of Tasmanian forest from loggers, and Bush Heritage Australia was born. The organisation has since raised more than $100 million to buy almost one million hectares of high-conservation-value private land in Australia.

The Canadian scientist and conservationist Dr David Suzuki describes Brown as a global treasure, up there with “Mandela and the Dalai Lama - a person of the greatest integrity and courage, a person who has inspired others through his lifetime commitment”. Conversely, the Nationals senator Barnaby Joyce says behind Brown’s public image as a “benevolent uncle” there’s a “ruthless, pragmatic, artful politician”, while the Liberal senator Eric Abetz says he wrecked the Tasmanian economy and is now causing the same havoc on the mainland.

There’s venom in Abetz’s voice when he talks of Brown. The veteran political commentator Alan Ramsay says this is typical, as Brown is widely loathed by politicians from both major parties. “He represents everything that they are not,” Ramsay tells me. “He is a man of conviction, a thoroughly honest man, a man of principle. They see in him what they want to be and they hate him for it.”