Saturday, 9 April 2011

Carbon Cash

Carbon Cash sounds a lot better than boring old carbon tax, which is why I used it as the title for today's post. Unfortunately, I am not talking about carbon based angiosperms growing hundred dollar bills on them.

I hate carbon tax. It hasn't been implemented yet in Australia but it is a very hotly debated subject in parliament.
I can see why the government would want it; the government increases its revenue all in the name of being concerned about the environment.

I don't believe for a second that any politician of the major parties genuinely cares for the environment. All I can see that will come of this carbon tax is that the far majority of the revenue from it will just get absorbed by the bureaucracy and a tiny smidgen of it might go towards actually fixing our carbon addiction.

But that isn't my main concern. It is the effect that it will have on the people. Not everyone can afford to pay this carbon tax. Taxes are high enough as it is, the last thing we need is another tax.

My rudimentary economics knowledge begs to differ, higher taxes just mean less private spending which reduces economic growth (on the consumer side) and inflation. This is not a bad thing. Unfortunately, with the advent of credit cards, higher taxes will probably just mean higher private debt as citizens resort to using their credit cards to pay the bills.

It has been suggested to leave those who are financially struggling exempt from the tax or give them some kind of compensation to make up for the new tax. This sets a dangerous precedence for class warfare though.
And what happens in a big recession and unemployment hits 40%? Suddenly the carbon tax revenue crashes and the government has a big black hole in their tax revenue (on top of all the other losses in revenue that happen to a nation's government during a recession).

We could just keep the carbon tax for industry and not consumers... In which case this puts direct economical pressure on small businesses (the big businesses can easily afford a carbon tax). It doesn't even address the problem either. 68% of carbon dioxide produced in Australia comes from our power plants and most of their power goes to major cities to supply the consumer (
Another ~20% is produced by agriculture, but we wouldn't want to tax our farmers would we?

Whether you believe in climate change or not ( I do, just for the record), this is a bad policy. There are other ways to fight climate change, slapping a tax on the problem will not make it go away no more than throwing money at it will make it go away. Here are some better suggestions: legally restrict carbon emmisions (eg energy suppliers cannot produce more than a tonne of carbon dioxide per kilowatt), subsidise renewable energies, etc. They aren't the best suggestions,I know, but they seem a lot better than adding a carbon tax in my opinion.

Finally, may I just finish off with a quote another climatically concerned citizen brought to my attention:

"We contend that for a nation to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle."
-Winston Churchill


  1. Carbon tax is just that: a tax, used to exert power of those who don't have any!

  2. very interesting article !

  3. thats interesting, all about the tax, but like The Biscuit Eater said...

  4. Biscuit eater took the words out of my mouth, couldnt have said it any better. +Following

  5. Perfect quote, but I don't think anyone should be exempt from taxes, that just encourages laziness

  6. Interesting post. following