the case for a carbon tax

The immense carbon cost of projects like this are borne by the taxpayer without a carbon tax.

The case for a carbon tax

A discussion of the case for a carbon tax by Mark O’Brien

The case for a carbon tax: the Australian media is full of terror about the potential impacts of a carbon tax, a tax that is being fought just as hard by the mining lobby as the mining tax was.

‘It will put miners out of business’, ‘it will be a job killer’, ‘it will drive the energy bills of the ‘battlers’ through the roof’, and ‘Australia will be ruined’ are just some of the headlines we have gotten used to hearing and seeing.

This public ‘debate’ is being somewhat skewed by the fact that mining magnate Gina Rheinhardt, daughter of the late anti-union and anti-government miner Lang Hancock, who is Australia’s wealthiest person and on track to become the world’s richest person, and who made $10 million a day in 2013, has ‘diversified’ into media, and now owns large chunks of Channel 10 Holdings and Fairfax.

While these media organisations may profess to integrity of reporting, it is simply not possible that the opinions and wishes of a large shareholder are not considered by editors and producers when compiling news and the ‘angle’.

Gina herself has admitted that she has bought these media holdings to influence policy regarding both the mining and carbon taxes.

As Rupert Murdoch has demonstrated over and over, if you control a section of the media, then you can actually control the whole debate. So the case for a carbon tax never gets a real airing.

Whereas now the discussion ought to be along the lines of how best to make a carbon tax work, how best to protect industry from the impacts such a unilateral shift will make to our international competitiveness, it is now about whether we ought to have one at all.

This is compounded by the fact that our international competitors are generally countries politically dominated by economic interests rather than their own sovereign longer-term interests such as considering environmental impacts,

This is how Murdoch has pushed his own policy agendas, and how the (increasingly) mining controlled media are pushing their own agendas.

The carbon cost of mining projects

I have in my possession (see Business in a Post Carbon Economy on this website) a letter from the Department of Climate Change that refers to the massive natural gas projects currently (2011) undergoing construction in the Kimberleys in WA.

In this letter, the Department says that these two projects will add approximately 1.86% onto Australia’s total annual carbon emissions. Without a carbon tax, the taxpayer will have to foot the bill for ‘cleaning’ these emissions.

If the Australian Liberal Party rhetoric is to be believed then the cost of cleaning emissions via a shift to renewables is too prohibitive, citing vast numbers that are thrown into the public arena.

Consider that it will (conservatively, as if it were at this level the Liberals would not be squawking as much and gaining so much traction in the miner-driven media) cost $2 billion/year, of taxpayer funds, to ‘clean’ each % point of our emissions.

If this is true, then this project will attract a virtual subsidy of approximately $3.6 billion per year, which over the life of the 20 year project will add up to $72 billion (not adjusted for inflation).

So this is a $72billion subsidy for a $120billion project to supply gas, at a far cheaper rate (20%) than in available to gas resellers in Australia, to China and Japan.

If there is a carbon tax that is actually representative of the actual costs of carbon production, then this carbon tax ‘impost’ will be borne by the largely European and American consumers of Chinese and Japanese products, as it should be.

Domestic Electricity Bills

This is another area where panic is being spread, thickly, as though it were Nutella on a kid’s sandwich. Yes, there will be an impact on household electricity bills, but not nearly as much as is being flagged.

(See Carbon Solutions as Political Footballs, a brilliant analysis of the Australian energy market published on the ABC website, to see how various levels of carbon taxation will impact household bills.)

And in any case, if domestic energy costs rise, why should those who are frugal, or who have solar panels or have installed at their own expense energy-saving devices, pay the same for their power as those who live in their monster houses with AC going 24/7, with big pools, plasma tvs and all the other large energy consumers?

If we had some sense, surely there would be some mechanism whereby those who use less energy, which oddly enough are those whose rising energy bills are the apparent fodder for the panic, pay a minimal amount while those who use more than the average, pay a premium, perhaps even double the price/kwh?

This could even look like there is no charge outside of connection fee, for those who use minimal power, and over and above that people pay a sliding scale, perhaps even double the usual tariff.

Politically this would work as it protects the battlers and pensioners whilst giving serious encouragement to people to reduce consumption.

Bob Brown, who is being castigated by the media (and remember what organisations are driving them – and the ABC cannot, due to Howard’s ‘fairness in reporting’ restrictions, go against this flow) for all his talk of a low carbon future, is right when he says that the big end of town is being subsidised by the taxpayer.

Perhaps finally there is a pollie who can take polluters to task and derail the gravy train, and make no mistake, this is a derailment.

By Mark O’Brien May 27, 2011

Postscript, July 2014.

The Abbott government, continuing its social and environmental wrecking ball policy, has succeeded, with the help of billionaire miner Clive Palmer and his PUP Party acolytes, in dumping any carbon pricing mechanism, so allowing big polluters to do what they want.

With the chickens thus running the hen house, it is not looking good down under!!

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