carbon tax - unintended consequences, page-40

ButcherBoy

" What steps has this foundry owner taken to reduce the carbon intesinty of his business? If the price of coal-fired electricity went up he might consider switching to renewable sources"

you do understand that the current carbon tax is intended to raise the carbon intensive energy to a point (ie price higher than now) where it is equivalent in price to those technologies which provide electricity with lower carbon intensity? ie by switching you don't save money! you only start saving when this price impost on carbon intensive energy continues to rise, at which point you have already gone out of business

the argument that prices are already rising, and thus people should be switching anyway is a bit misleading. a switch now still doesn't provide any marginal benefit until the cross over point between the costing of the two sources occurs in the medium term future. the tax is designed to push the price of electricity towards this point more rapidly, that is increase the price quicker to allow inefficient technology to be price competitive

simple really