Opinion piece on carbon tax
29th July, 2011
Labor’s proposed carbon tax is a veritable birthday cake full of anomalies and contradictions. The carbon tax looks everything like the camel designed by a committee that it is. It will destroy Australian jobs and increase the cost of everything we buy, but it will not improve the environment and will actually increase global CO2 emissions.The tax will raise over $30 billion in its first three years but in the process creates a $7 billion budget black hole.
Labor says that the tax is designed to increase the cost of the things we do so that we change our behaviour and emit less CO2. Then the government says it will pay compensation for these increased costs – on average 20 cents a week above what they claim the carbon tax will add to living costs. What then is the incentive to make behavioural change to lower CO2 emissions? Why switch off your heater on a cold morning or walk to work if the government is going to compensate for carbon tax induced costs increase?
The Government says Australia must impose a carbon tax, or be left behind by the rest of the world. Their own Productivity Commission report made it clear that Australia is already doing about the same as other countries to reduce CO2 emissions.
But this is not a small catch-up tax. It will be by far the biggest carbon tax in the world. It will take only four months for Australia’s carbon tax to collect as much money as the European scheme has raised since it began six years ago. But the European scheme covers thirty countries and 500 million people. Europeans pay on average $1 per person per year for their emissions trading scheme, while Australians will pay $400 per person in the first year alone. Yet European emissions are ten times greater than those from Australia.
It will take only one month for the Australian scheme to raise the amount of money that the limited United States scheme has raised since its commencement.
As only Australians will be paying a carbon tax of this magnitude, Australian industry will inevitably become less competitive. One by one, factories will close and we will buy products from other parts of the world where environmental requirements are less stringent.
Australia’s carbon tax will actually increase global emissions – not make them smaller.
Australia’s cement manufacturing industry is the second lowest emitter of CO2 in the world and when transport emissions are taken into account, the local industry offers the lowest carbon footprint option for Australia. Labor’s proposed carbon tax will apply to many of the direct emissions of the cement industry as well as to its electricity, shipping and transport - significantly increasing costs. Closures have already been announced for the cement plants at Kandos and Rockhampton. Australia will not stop using cement. We will, instead, import it from China where CO2 emissions are up to double those from the Australian industry. Australia will lose the jobs and global emissions from Australian cement will double.
This story can be repeated in almost every sector. If you buy New Zealand butter, canned Thai pineapples, Brazilian concentrate, you will not pay a carbon tax, but if you buy the product of Australia, you will.
If you buy an imported luxury car, you will not pay a carbon tax on its manufacture, but if you buy a Holden, Falcon or even a hybrid Toyota, you will.
If you fly to Tasmania, Cairns or the Gold Coast for your holiday, you will pay carbon tax, but if you fly to Fiji, Vanuatu, USA or China, you will not.
If you take a bus or a train to work, your fuel will be taxed, but if you drive your own car to work, it will be tax free (except if it is an electric car). And the Government is proposing a new 12.5 cents a litre excise on clean LPG. The Government says its new tax will result in emissions’ savings equivalent of taking 45 million cars off the road, but Australia only has 16 million vehicles and private cars have been exempted from the carbon tax on their fuel.
If you send Queensland sugar from Mackay to Melbourne by ship, you will pay the carbon tax, but if you import the sugar from Thailand or Brazil, you will not (even though the carbon footprint will be much larger).
That is not the end of the anomalies that the Labor/Greens/Independent carbon tax committee has concocted. Better roads reduce CO2 emissions from trucks and motor vehicles but the carbon tax will add to road construction costs, meaning less new roads will be built.
If your factory emits 24,999 tonnes of CO2, you will not have to buy a single permit. But if the factory expands and produces just one extra tonne of CO2, it will be up for well over half a million dollars of permits to cover the previously exempt emissions. What incentive is that to expand?
Coal fired power stations have given Australia a strategic advantage with low cost electricity, but now the Government says that ninety per cent of these power stations must close by 2050. The Greens insist that these power stations be replaced with renewable alternatives, like wind and solar, and will at least quadruple our electricity generating cost, giving us some of the most expensive electricity in the world. Yet the Government insists that Australia’s coal exports will double – mainly to help build hundreds of new coal fired power stations in Asia.
How does moving coal fired power stations from Australia to Asia reduce global emissions? How will it reduce the temperature? How many polar bears will it save? Why will our environment be better?
Yet in spite of all of this pain, the Government admits that Australian emissions will actually rise by 43 million tonnes by 2020 and Australia will be spending billions of dollars buying permits from other countries to cover these emissions. And herein lies another anomaly. Most of these permits have been created for activities which reduce or sequester carbon in ways that can not be counted if they were undertaken in Australia. And while we are doing all this, just to lower the increase on our 578 million tonnes of CO2 emissions, China’s emissions alone will rise by 7 billion tonnes.
And the Government accuses the Coalition of scare tactics?
