The End of the World
This blog has been silent for longer than I’d like to recall (*crickets*), but I really did think that I wasn’t going to wake up this morning, or if I did, it would be in limbo.
See, the world ended today July 1, 2012 because the carbon levy came into being. Maybe it’s been put off until tomorrow when the markets open. This will be the next shock that brings the global economy to its knees.
Its direct impact, as a tax, is the broad equivalent of increasing the GST by 20 per cent or so.
But it is the carbon tax’s impact on the underlying economy that makes it a very different beast to the GST.
That is because the carbon tax mounts a direct attack on the foundations of our modern economy and of our ordinary everyday lives: access to cheap, plentiful and reliable power.
Bizarrely, we have a government which actually wants to destroy our overriding national comparative advantage viz-a-viz the rest of the world. Cheap coal-fired electricity.
It’s based on a series of lies – and, you can only conclude, the mother of all exercises in self-delusion by the Cabinet and, critically, Treasury.
And all to absolutely no point.
Our carbon tax, even on its own terms, can make not the slightest difference to global emissions of carbon dioxide, and so to the climate.
Ummm Tezza McRant, sorry mate, it can and it will make a difference. That difference is measurable, is accepted in the scientific literature, has been accepted as expert evidence in courts of law (e.g., the NSW Land and Environment Court). Patrick Moriarty at The Conversation disagrees with this, saying that a market-based scheme cannot do enough. While that may be true, a price is necessary, but dealing with consumption and waste is better. For example, Alan Pears has compelling statistics showing how much waste heat is produced in energy production (up to 88%).
Even if the permits were given away for nothing, they would have a lasting impact on an ongoing basis because of the ongoing cap on emissions. This was the case for sulphur dioxide emissions in the US. It’s the same as paying a garbage levy that’s directly linked to the amount of rubbish a household produces.
That’s not going to stop various suppliers from gouging customers on the back of this. The Australian Consumers and Competition Commission will have its hands full as discussed recently on the ABC’s 7:30 Report.
I was a little surprised to get a letter from my energy supplier this week to say my energy costs were going to fall. Because I was already buying 100% green power, which was becoming cheaper with the levy, they were reducing the price to minimise double counting. I can afford to pay for my environmental externalities, so do when I can, if I haven’t minimised consumption through behaviour (I do cheat a bit).
Please buy from suppliers who factor the natural and social environment into their supply chains when you can. Every bit counts, a lesson those in the developing world haven’t forgotten but we have.
The biggest issue is with the socially disadvantaged who need to use energy for heating and cooling but have limited funds. The compensation coming through will not always cover their outlays and existing gaps in social safety nets may become wider. This is an issue with indigenous communities, tenants, refugees and recent immigrants. Those running temporary accommodation for the homeless will also be hit – hopefully there is a mechanism to identify where these gaps may be – not holding my breath, though. A terrific article on how the poor were pulling their weight environmentally was published last week in The Conversation by Lesley Head.