Who would have thought that one of the 'unintended consequences' of a carbon tax would be higher costs for emissions intensive industries? Well strike me down with a feather! In an ideal world there would be a uniform, global price on carbon, which would reflect the true cost of cleaning up the atmospheric mess. But I admit we are not in an ideal world.
Unfortunately we are amongst the worst per capita perpetrators in the world, so we need to do our share of the heavy lifting. But we are also too arrogant to shoulder anywhere near our fair share of the responsibility. Why is it that India already has a modest carbon tax, yet they are considered to be a poor, developing nation? South Korea, China and Taiwan are also planning to implement carbon taxes/prices on carbon. Why do we seem to think we are first movers on this issue? We have signed international treaties to reduce emissions and both sides of politics have emissions reduction targets of 5% as a core platform. A pigovian tax such as a carbon tax is the most efficient way to get there. Why do people deny such a reality?
We are at the back of the pack according to Bloomberg Business Week...
"Australia's current policies, including a goal of sourcing 20 percent of power from renewable energy by 2020, imply a carbon price of $1.70 a ton for electricity producers, the study found. That compared with $29.30 in the U.K., $14.20 in China, $5.10 in the U.S., $3.10 in Japan and $0.70 in South Korea."
Why should we be subsidising cheap electricity to emissions intensive industries? This seems very counter-productive to me. Surely a foundry that "melts scrap steel using electricity" is not necessarily very efficient - by the way, I don't know what the alternative is, but I do object to energy intensive industries getting a free ride from the government (and therefore from taxpayers like you and I), thereby subsidising pollution into the atmosphere. 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 - that is a good thing in my view. He also needs to realise, as he is seeing, that electricity prices are on their way up with or without a carbon tax, due to ageing infrastructure and a lack of investment due to general uncertainty.
The bottom line is, why should we dig deep to protect businesses that are polluting the atmsophere and endangering our future, no matter where they are on the planet?
People here on HC who do not belive in human induced climate change (i.e. the vast majority it seems) need not bother responding to that question.
