Carbon Tax versus Emissions Trading (1 Viewer)

[withoutaface]

This could shape up to be an interesting debate if the Coalition decides to run with a carbon tax policy and/or the Senate inquiry concludes that ETS is not the best way to go.

Some resources on the subject:
http://www.cis.org.au/policy_monographs/pm80.pdf this is written by John Humphreys of the Liberal Democratic Party for the Centre for Independent Studies (one of the two big libertarian think tanks in Australia). From 2007 but very extensive and still relevant.

ETS is better than tax | The Australian written by Penny Wong for The Australian.

Essentially the arguments are that ETS provides a more stable and reliable reduction in emissions at a higher administrative cost, whereas a tax on carbon may over or undershoot the goal, but this could be ameliorated by reviewing the price of carbon each year, and has the overriding benefit that the government isn't arbitrarily assigning x tonnes of carbon per business (i.e. picking winners).

Thoughts?

EDIT: Thread is not for climate change denial. There are thousands of others for that.

 

[boris]

ETS is fucking stupid and anyone supporting it ought to be shot.

they jumped the gun and thought up a stupid system and now are too proud to change their mind and go with something that will fucking work.

John Humphreys is a genius.

Penny wong is a fucking zipperhead gook slut. (lol fucking love gran torino)

In conclusion climate change is psuedoscience and there is no proof lol

 

[Graney]

I like ETS and its market based mechanism.

Essentially the arguments are that ETS provides a more stable and reliable reduction in emissions at a higher administrative cost, whereas a tax on carbon may over or undershoot the goal, but this could be ameliorated by reviewing the price of carbon each year, and has the overriding benefit that the government isn't arbitrarily assigning x tonnes of carbon per business (i.e. picking winners).

I might be misunderstanding you, or the system involved, but wouldn't a flat carbon tax excessively punish some industries (or is a flat tax not what is being proposed)? Like, the coal power industry deserves to be able to run its industry cheaper than other industries- i.e. it would be given more credits under an ETS system, industries that can and should easily cut their emissions would be given less etc...

There have been problems with corruption and scams in European nations that are trialling similar ETS, but all I know is, ETS would definetly cut emissions to a set level. Administrative cost is meh. Carbon tax is too wild and unpredictable.

 

[Enteebee]

imo the best results would come about through a carbon tax.

 

[jb_nc]

hey guys remember when they floated carbon shares in europe at like 20 euros a tonne and they collapsed to like 30 euro cents per tonne

 

[moll.]

I like ETS and its market based mechanism.


I might be misunderstanding you, or the system involved, but wouldn't a flat carbon tax excessively punish some industries (or is a flat tax not what is being proposed)? Like, the coal power industry deserves to be able to run its industry cheaper than other industries- i.e. it would be given more credits under an ETS system, industries that can and should easily cut their emissions would be given less etc...

There have been problems with corruption and scams in European nations that are trialling similar ETS, but all I know is, ETS would definetly cut emissions to a set level. Administrative cost is meh. Carbon tax is too wild and unpredictable.

I was under the impression that the carbon tax involved fixing a tax price for every tonne of emmissions released. This could then be reveiwed and altered on a year-by-year basis in line with current trends and the end goal.
As for excessive burdens on certain industries, that could be overcome by the gov't simply allowing those industries a set level of untaxed emmissions. For example, giving the coal industries 200 tonnes of emmissions without tax, and everything over this would be taxed. Alternatively, the revenue could be given out in subsidies, like the gov't plans for the ETS. I'd prefer the former as it is easier to change and involves less bureaocracy to work out the levels.

 

[boris]

Graney did you hear the bit on hack on triple j the other day with some guy (may have been humphreys) talking about ets vs carbon tax? He had some very good points

 

[Graney]

hey guys remember when they floated carbon shares in europe at like 20 euros a tonne and they collapsed to like 30 euro cents per tonne

I wish I understood economics, the why of this sentence?

Market correction?

There were too many credits available to industries who could reduce their emissions further and gain greater value by selling them off, thus the market flooded?

Is this really a terrible thing? The system will work over time, credits will gradually be removed from the system, emissions will come down, prices will go up etc... They initially overvalued credits and released too many, but it all comes good in the end, who is harmed by this system?

If anything, flooding the market with cheap credits and being cautious to begin with is a good thing (so long as the total value of credits in existence is equal or below current national emissions), allows people to obtain a bulk of credits and time to adjust before credits become expensive and scarce.

 

[withoutaface]

I like ETS and its market based mechanism.


I might be misunderstanding you, or the system involved, but wouldn't a flat carbon tax excessively punish some industries (or is a flat tax not what is being proposed)? Like, the coal power industry deserves to be able to run its industry cheaper than other industries- i.e. it would be given more credits under an ETS system, industries that can and should easily cut their emissions would be given less etc...

There have been problems with corruption and scams in European nations that are trialling similar ETS, but all I know is, ETS would definetly cut emissions to a set level. Administrative cost is meh. Carbon tax is too wild and unpredictable.

The entire point of any climate change policy is to make burning coal more expensive and drive people to renewables. Why shouldn't those who emit the most be the most deeply affected?

 

[jb_nc]

The tax is better because it is cheaper to implement and run and is a completely fair user pays system.

The only advantage ETS has is more precise targets can be set, but those targets are themselves arbitrary.

The most important thing for me when it comes to a viable Carbon reduction scheme is including petrol equally in the scheme. So far Labor wants to exclude it and the Liberals have been very quiet about the issue.

Petrol is already taxed at $163 per tonne of carbon dioxide which is going to be more than any tax price.

 

[withoutaface]

Also just for the record, ETS is far less market based than a tax, because it puts more discretionary power in the hands of the government to appease specific rentseekers (the coal industry being one).

 

[withoutaface]

The excise on petrol doesn't even pay for the cost of building and maintaining roads.

I'd be happy to see the excise scrapped if roads were privatized or users were tolled for all road usage.

Since that seems unlikely, it is reasonable for the excise to remain in place in addition to a tax on carbon.

Brendan Nelson would be rolling on his backbench!

 

[The Authority]

This thing is extremely confusing for a normal person like me. I know you should not pollute and do things differently. Why can they just identify what pollutes the environment, have ridiculous taxes on them and subsidize the greener substitutes. This nonsense of trading etc...absolute bullshit.
Politicians have nothing else to do but pretend they are doing a complicated job, where as all they all do is argue with each other just cos they are from different parties. Anybody with me on this?

 

[Graney]

The entire point of any climate change policy is to make burning coal more expensive and drive people to renewables. Why shouldn't those who emit the most be the most deeply affected?

Unlike much other production, electricity is a necessity, increases in price most affect those least able to afford it.

Idk about the idea of poor families having to compete on an equal price footing with the aluminum smelting industry to pay for electricity.

 

[boris]

This thing is extremely confusing for a normal person like me. I know you should not pollute and do things differently. Why can they just identify what pollutes the environment, have ridiculous taxes on them and subsidize the greener substitutes. This nonsense of trading etc...absolute bullshit.
Politicians have nothing else to do but pretend they are doing a complicated job, where as all they all do is argue with each other just cos they are from different parties. Anybody with me on this?

Because people have jobs and shit and votes and that would destroy said industries and the economy.

 

[withoutaface]

The Authority: This is what carbon taxes do. They heavily tax the big emitters and let renewable operators run for practically nothing.

Graney: 1. Humphreys advocates a revenue neutral tax, so we could bump up the income tax threshold by a fair bit to compensate, thus mitigating the effect upon families on lower incomes.
2. We can't expect China and the developing world to cut their emissions if half of our population has no incentive to cut theirs.

 

[Graney]

Graney: 1. Humphreys advocates a revenue neutral tax, so we could bump up the income tax threshold by a fair bit to compensate, thus mitigating the effect upon families on lower incomes.

That would be beyond belief

 

[hello2004]

Carbon Tax > Emissions Trading:

- Far easier and cheaper to implement

- Not open to rorting like a trading system would be

- Having a stable, predictable price of pollution would be more beneficial to businesses and consumers instead of a floated price which will be subjected to large positive and negative shocks

- A trading system will inevitably lead to a related derivatives market. These contracts are traded by eager dickheads hoping to make a quick dollar. The creation of poorly priced financial products (CDOs in particular) has already cost the world billions of dollars. We should avoid a repeat.

 

[moll.]

Ok, so now I'm really up for supporting a carbon tax, not an emmissions scheme:

And remember, every little bit we do to reduce our personal consumption of electricity and petrol helps save the planet from global warming.

Or does it?
...
As Dr Richard Dennis, executive director of the Australia Institute, has been tirelessly explaining, nothing we choose to do for moral reasons will do anything to reduce the nation's total emissions of greenhouse gases.

That's because the nation's total emissions will be controlled by an annually reducing cap, designed to reduce our emissions by 2020 to between 5 per cent and 15 per cent (it's yet to be decided) less than our emissions in 2000.
...
So when you and I voluntarily cut back our emissions we don't reduce the nation's total emissions, we just make more room for other, industrial polluters - say, the aluminium, steel or cement industries - to increase their emissions.

Emission impossible: the sad truth

Thank God for Ross Gittins. Where would we be without his witty, informative and understandable commentary?

 

[CIV1501]

So what you're saying is that the government is actually wrong????

Edit: fuck i hate the zipperhead gook penny wong lol