Australia Repeals 'Useless' Carbon Tax

[waldo]

And in other news, BCs carbon tax seems to be working.

yes! Yes, it certainly does (seem to) work:

Prime Minister Stephen Harper repeatedly claims that a carbon tax would “destroy jobs and growth.” Yet the evidence from the province that actually passed such a tax – British Columbia – tells a different story.

The latest numbers from Statistics Canada show that B.C.’s policy has been a real environmental and economic success after six years. Far from a being a “job killer,” it is a world-leading example of how to tackle one of the greatest global challenges of our time: building an economy that will prosper in a carbon-constrained world.

B.C.’s tax, implemented in 2008, covers most types of fuel use and carbon emissions. It started out low ($10 per tonne of carbon dioxide), then rose gradually to the current $30 per tonne, which works out to about 7 cents per litre of gas. “Revenue-neutral” by law, the policy requires equivalent cuts to other taxes. In practice, the province has cut $760-million more in income and other taxes than needed to offset carbon tax revenue.

The result is that taxpayers are coming out ahead. B.C. now has the lowest personal income tax rate in Canada (with additional cuts benefiting low-income and rural residents) and one of the lowest corporate rates in North America. You shouldn’t need an economist and a mining entrepreneur to tell you that’s good for business and jobs.

At the same time, it’s been extraordinarily effective in tackling the root cause of carbon pollution: the burning of fossil fuels. Since the tax came in, fuel use in B.C. has dropped by 16 per cent; in the rest of Canada, it’s risen by 3 per cent (counting all fuels covered by the tax). To put that accomplishment in perspective, Canada’s Kyoto target was a 6-per-cent reduction in 20 years. And the evidence points to the carbon tax as the major driver of these B.C. gains.

Further, while some had predicted that the tax shift would hurt the province’s economy, in fact, B.C.’s GDP has slightly outperformed the rest of Canada’s since 2008.

With these impressive results, B.C.’s carbon tax has gained widespread global praise as a model for the world – from organizations such as the OECD, the World Bank and The Economist. But in the rest of Canada, it is less heralded, which is a shame. Because when you look beyond the political rhetoric and examine the facts, B.C.’s experience offers powerful, positive lessons for Canada.

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[bush_cheney2004]

Not sure what the carbon tax shifting scheme in BC has to do with Australia repealing its carbon tax, but it is not as successful as advertised for actually reducing emissions, which were declining anyway. Further, it looks like the BC tax shifting scheme has made things more regressive, has a widening revenue gap, and is not sustainable unless the carbon tax rates are increased.

It is clear that whatever happened in British Columbia, Canada did not impress the Australians.

[waldo]

Not sure what the carbon tax shifting scheme in BC has to do with Australia repealing its carbon tax, but it is not as successful as advertised for actually reducing emissions, which were declining anyway. Further, it looks like the BC tax shifting scheme has made things more regressive, has a widening revenue gap, and is not sustainable unless the carbon tax rates are increased.

the second and fourth posts in this thread speak to a carbon tax from a Canada and BC perspective, respectively. You also made broad-based non-specific to Australia statements concerning a carbon tax. The BC carbon tax has been in place for a 'longish' period of time; one that affords meaningful review of impact, results and findings associated with a carbon tax.

you've failed to support your initial 'useless' tag... you failed to acknowledge that (prior to the tax) Australia's reduced emissions were a direct result of it meeting its Kyoto committment... that, unless another policy is introduced, Australian emissions are projected to increase. The BC (revenue neutral) carbon tax example counters your previous broad-based claim concerning, as you said, "money in your wallet".

you now provide additional statements/claims concerning the BC carbon tax... while providing no support and substantiation for your statements/claims. Per the study associated with a prior link provided:

The BC government has kept its promise to make the tax shift ‘revenue neutral’, meaning no net increase in taxes. In fact, to date it has returned far more in tax cuts (by over $300 million) than it has received in carbon tax revenue – resulting in a net benefit for taxpayers. BC’s personal and corporate income tax rates are now the lowest in Canada, due to the carbon tax shift

[bush_cheney2004]

Getting back to Australia, the repeal of the much hated and useless carbon tax fulfilled a campaign promise made by PM Abbott and his party:

The carbon tax and plans for an eventual emissions market dominated Australian politics for years, gaining momentum in 2007, when former Labor Prime Minister Kevin Rudd called climate change "the greatest moral challenge of our time" and made signature of the Kyoto climate protocol one of his first political acts after winning power. Mr. Abbott defeated Mr. Rudd—then in his second stint as prime minister—10 months ago, in an election fought largely over the carbon price and its impact on energy costs.

http://online.wsj.com/articles/australia-repeals-carbon-tax-1405560964

As for other international efforts, it looks like Quebec got more attention than British Columbia for carbon cap & trade schemes. Australia's decision is significant because it is the first major developed nation to abandon carbon tax policy.

[waldo]

Australia emissions per capita... even worse than the U.S. / Canada!

[Mighty AC]

After reading through this thread it seems that a revue neutral carbon tax can effectively lower emissions without killing the economy. So that useless tag listed in the thread title is incorrect.

Oz is the world's fourth largest coal producer so I can see why many short sighted Aussie's would rather not have it taxed. Politicians will make poor choices to garner votes or corporate support all the time and this one has worked for Mr. Abbott.

[TimG]

After reading through this thread it seems that a revue neutral carbon tax can effectively lower emissions without killing the economy. So that useless tag listed in the thread title is incorrect.

It really depends on what comparative advantage an economy currently has. If an economy already has a comparative advantage in low emission industries then a carbon tax is not a big deal. If an economy already has a comparative advantage in high emission industries then a carbon tax will kill the economy. BC with large sources of hydro-power and natural gas could get away with a modest carbon tax. Alberta or the maritimes could not.

People who think that economies can change their comparative advantage simply because the government decides it would be nice are delusional. Australia needs to produce coal because that is where it has a comparative advantage and it is silly to suggest that the industry should be closed down.

Edited July 18, 2014 by TimG

[Boges]

After reading through this thread it seems that a revue neutral carbon tax can effectively lower emissions without killing the economy. So that useless tag listed in the thread title is incorrect.

Oz is the world's fourth largest coal producer so I can see why many short sighted Aussie's would rather not have it taxed. Politicians will make poor choices to garner votes or corporate support all the time and this one has worked for Mr. Abbott.

What about those that don't pay much I tax but need to drive to work? A carbon tax effects the price of everything. Income tax cut mostly help the most affluent people.

A tax shift policy would have to be clearly defined as to how much it could save.

The 2008 Green Shift proposed the same thing and was roundly panned by the electorate.

JT hasn't said how he'll price carbon. But I imagine it would be similar.

[waldo]

Income tax cut mostly help the most affluent people.

in the BC carbon tax example, the most income tax/rebate gains were realized by the 'middle/lower' classes.

[waldo]

Australia needs to produce coal because that is where it has a comparative advantage and it is silly to suggest that the industry should be closed down.

closed down??? I guess you haven't heard of carbon sequestration, hey? And yes, it has been shown to be viable... and practical... but yes, it does cost industry money to deploy.

[waldo]

BC with large sources of hydro-power and natural gas could get away with a modest carbon tax. Alberta or the maritimes could not.

People who think that economies can change their comparative advantage simply because the government decides it would be nice are delusional.

the current Alberta Carbon tax is $15-a-tonne... more than the $10 the BC Carbon tax was introduced at. And that's a completely voluntary pursuit from the Alberta Progressive Conservative party; i.e., it wasn't an election issue. Somehow, in spite of that tax, Alberta BigOil manages record profits and the government managed an operational surplus of $1.2 billion over the first nine months of the 2013-14 fiscal year ending December 2013 - go figure! I encourage you to support this, your latest claim, concerning the BC "comparative advantage".

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[Boges]

It's sort of ironic that BC can handle a carbon tax (though they don't really have any electoral alternatives to overturn it) but they have a hissy fit over what was effectively a carbon tax in the introduction of the HST.

http://www.cra-arc.gc.ca/nwsrm/fctshts/2013/m03/fs130327b-eng.html

In Ontario the HST was accompanied by income tax reductions and lump sum payments.

Overnight on July 1, 2010. The provincial portion of the VAT (7%) was tacked on to products that were previously exempt.

Most notably that was Hydro, Heating fuel and Gasoline. So effectively it was a carbon tax. Also the introduction of the HST was largely absorbed in Ontario, it's not like people drive less.

What has adversely effected Ontario is the Green Energy Act which continues to raise the price of hydro indefinitely. The increase was so apparently that the government actually borrowed money so they can apply a 10% reduction to everyone's bill for 5 years hiding the accurate cost of the electricity.

Edited July 18, 2014 by Boges

[bush_cheney2004]

BC has a tax shifting scheme more than a effective carbon tax. Emissions were already headed down for a variety of reasons, with similar results in provinces without a carbon tax. Australia repealed the real deal, as it was useless and politically unpopular, putting industries like LNG at a comparative disadvantage.

Edited July 18, 2014 by bush_cheney2004

[TimG]

BC has a tax shifting scheme more than a effective carbon tax. Emissions were already headed down for a variety of reasons, with similar results in provinces without a carbon tax.

This is the most annoying part of a debate. Properly structured in the right places a modest carbon tax is better than alternatives like income tax. What I dispute are the claims that a modest carbon tax will have any measurable effect on emissions. The case of Alberta's Carbon Tax seems to confirm that (i.e. it was set low enough to ensure that it did not stop the growth of the industry or emissions). Edited July 18, 2014 by TimG

[waldo]

BC has a tax shifting scheme more than a effective carbon tax. Emissions were already headed down for a variety of reasons, with similar results in provinces without a carbon tax.

so you keep repeating... again without substantiating your statements/claims. Per national inventories through to the end of 2012, Alberta, Sask, Manitoba, and New Brunswick emissions are higher over that period. Ontario emissions are lower as attirbuted to its shift away from coal. Quebec emissions are lower as attributed to its 'cap and trade' system.

[waldo]

What I dispute are the claims that a modest carbon tax will have any measurable effect on emissions. The case of Alberta's Carbon Tax seems to confirm that (i.e. it was set low enough to ensure that it did not stop the growth of the industry or emissions).

define "modest". As I stated, Alberta's Carbon Tax showcases against record BigOil profits and a government surplus declared in a recent update. Your comment doesn't align with the expressed intent behind the Alberta Carbon Tax; i.e., "intended to sharply increase levies on carbon production and force large oil-industry producers to slash greenhouse gas emissions by as much as 40 per cent on each barrel of production"

Edited July 18, 2014 by waldo

[-1=e^ipi]

After reading through this thread it seems that a revue neutral carbon tax can effectively lower emissions without killing the economy. So that useless tag listed in the thread title is incorrect.

Oz is the world's fourth largest coal producer so I can see why many short sighted Aussie's would rather not have it taxed. Politicians will make poor choices to garner votes or corporate support all the time and this one has worked for Mr. Abbott.

Yes, the 'horror' of pigouvian taxes and tax shifting. It is amazing how much of the voting public can't grasp these concepts and only understand high tax vs low tax.

[waldo]

Yes, the 'horror' of pigouvian taxes and tax shifting. It is amazing how much of the voting public can't grasp these concepts and only understand high tax vs low tax.

hey! Good on ya... polluter pays! Joe/Josephine public is more nuanced and understands that a personal lower result means polluter's are paying.

[ReeferMadness]

What about those that don't pay much I tax but need to drive to work? A carbon tax effects the price of everything. Income tax cut mostly help the most affluent people.

Who are these people that "need to drive to work"? Is it legislated that they have to live in the suburbs and drive their 3 ton SUV two hours each way over paved city streets? Are they forced to at gun point?

[TimG]

Who are these people that "need to drive to work"? Is it legislated that they have to live in the suburbs and drive their 3 ton SUV two hours each way over paved city streets? Are they forced to at gun point?

People cannot move simply because they have a new job. Especially with two income families where moving closer to one job would make someone further from another. So plenty of people "need to drive to work".

Also, the cost of real estate in large cities is now beyond the means of most people without existing property. If people were not willing to commute long distances then the prices would be a lot higher than they already are. IOW - commuters reduce the cost of living close to the city for those that wish to do so. If you are living in the city core you should be grateful that there are so many commuters because without them a lot more of your income would be going to housing.

Edited July 19, 2014 by TimG

[waldo]

If people were not willing to commute long distances then the prices would be a lot higher than they already are. IOW - commuters reduce the cost of living close to the city for those that wish to do so. If you are living in the city core you should be grateful that there are so many commuters because without them a lot more of your income would be going to housing.

most people living in a large city core aren't typically living in single detached homes; accordingly their footprint on many levels is significantly less than that of those choosing to live in the burbs. Core dwellers in this regard have made conscious decisions to down-size, one that also includes family size. The sprawl cost to cities is one of the single-most drains on budgets requiring significant monies to extend servicing infrastructure... inclusive of transit, which, by your use of "commuters" implies you don't offer even a cursory consideration to public transit... but you'll certainly expect a city to provide full service bus/LRT/etc. provisioning to the burbs. Clearly, in a properly structured carbon tax policy, your burb commuters would be paying to support their decision to live farther and farther away from city cores.

[ReeferMadness]

People cannot move simply because they have a new job. Especially with two income families where moving closer to one job would make someone further from another. So plenty of people "need to drive to work".

Also, the cost of real estate in large cities is now beyond the means of most people without existing property. If people were not willing to commute long distances then the prices would be a lot higher than they already are. IOW - commuters reduce the cost of living close to the city for those that wish to do so. If you are living in the city core you should be grateful that there are so many commuters because without them a lot more of your income would be going to housing.

What nonsense. Even you don't really believe that tripe.

Our car culture didn't develop because people travel long distances to work. People travel long distances to work because cheap fuel and cars enabled wasteful lifestyles. Raise the price of fuel and cities will redesign themselves.

[Boges]

People work where they can get jobs. If you have a mortgage and change jobs it's not really easy to just move. And what if spouses work in different cities.

Unless you live AND in a densely urban area, usually a car is essential.

[ReeferMadness]

Twaddle. Double twaddle.

For most people, a car is a convenience. And an expensive one at that. Most people could save money (quite a lot, actually) by using a combination of public transit, cycling, walking, car shares, car rentals and taxis. Spend $40K on a new vehicle and it will spend most of its time parked, depreciating.

In many cities, public transit is weak but that's a matter of collective choice, not a matter of necessity.

Even for people who do have cars, most people have far more vehicle than they need. I lose track of the shiny behemoth SUV's that rarely, if ever, leave the city.

And then there is the matter of miles driven. It isn't necessary for you to commute 2 hours to your job just so you can cause extra environmental impact by having a half acre of lawn.

There are lots of choices. People are just too self-centred and too self-entitled to make the right ones.

[TimG]

For most people, a car is a convenience. And an expensive one at that. Most people could save money (quite a lot, actually) by using a combination of public transit, cycling, walking, car shares, car rentals and taxis.

Yes a car is a convenience. So is home heating, indoor toilets or free medical care (after all no one *needs* to live to 85 - wouldn't it be better for the environment if the government just let people die young?)

In many cities, public transit is weak but that's a matter of collective choice, not a matter of necessity.

Now you are just preaching a religion. You are no different than someone claiming that Jesus is savoir and all people should choose to believe in order to protect their immortal soul. People drive cars because it improves their quality of life. There is nothing wrong with this.

There are lots of choices. People are just too self-centred and too self-entitled to make the right ones.

And I am pretty sure you make lots of self-centered decisions when it comes to your lifestyle choices. You really have no business judging others for theirs. Edited July 20, 2014 by TimG