Coal generator admits its profits will fall without a carbon tax
Guest essay by Phillip Hutchings
Within minutes of the Australian parliament voting to scrap our carbon tax today, one of our major coal-fired electricity generators issued a profit warning announcement.
(You’ve got to love the ASX. Listed companies here must publicise anything which has a material impact on profits – favourable or negative)
In this case, AGL Energy announced its pre-tax profits will fall by $186 million in 2014/15 solely due to the removal of the carbon tax. The majority of this is related to the very large, but inefficient Loy Yang brown coal station which supplies 30% of the power needs of the state of Victoria.
Loy Yang, on AGL’s own figures also released today, emits 50% more carbon dioxide than the average of Australia’s power generators. It’s amongst the single biggest emitters of CO2 in Australia.
Yet it was due to get $242 million of “Government assistance” under the carbon tax arrangements this year. Most of which found its way to the bottom line.
Go figure.
Source – AGL Energy Limited 17 July 2014
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that explains why they increased rates when the tax was implemented………./snark
How ironic. Of course, it’s not a result of the tax, it’s the result of the accompanying corporate welfare which has now been snatched away. Neither one was a good idea in the first place.
One needs to separate the broad policy from how it is implemented. Poor implementation does not mean the original policy was a bad idea. Again, see British Columbia’s revenue neutral carbon tax for a real world, successful, working example of a carbon tax policy.
So the carbon tax actually subsidized high carbon emitters? Am I reading that right? It sounds like they called it a “carbon” tax merely as an excuse to implement another tax. It seems to have had little to do with its stated goal of reducing CO2.
I’m shocked. Shocked to discover that there’s gambling going on in this establishment. (And I always thought Casablanca was in Morocco.)
Oh, what a wicked web we weave, when first we practice to deceive. (They must’ve had AGW in Shakespeare’s day.)
@ur momisugly Louis
“So the carbon tax actually subsidized high carbon emitters? Am I reading that right? It sounds like they called it a “carbon” tax merely as an excuse to implement another tax. It seems to have had little to do with its stated goal of reducing CO2.”
The carbon tax had nothing to do with the stated goal. The purpose of the Carbon Tax was to raise prices of electricity via taxation based on the premise that CO2 is bad, and hand that money back to lower wage earners as a tax offset. That’s why it was revenue neutral; every dollar collected went straight out the door. The net effect, though, was to allow the Labor Party to take money from the “wealthy” and give it to the “poor”. Guess the demographic of the typical Labor Party voter.
Another phrase for this is “pork barreling”.
All this crap was wrapped up in what then-Prime Minister Rudd called “the greatest moral challenge of our time”. I mean, if the rich end up subsidizing the poor in dealing with a moral challenge, that’s ok, isn’t it?
Follow the money… One way or another someone’s scamming off it all.
Gee whiz, who saw that coming — a “tax” turning into a lurk where the “connected” profit.
Lou Geiger
Again, see British Columbia’s revenue neutral carbon tax for a real world, successful, working example of a carbon tax policy.
Well, successful for Bellingham, perhaps.
British Columbia’s carbon tax in fact does not have any effect other than on the taxpayers wallet. The data used is incomplete and misleading. See earlier Anthony post.
More evidence of just how unjust and insane the carbon tax concept actually is.
End it world wide.
This is a tiny example of what goes on with U.S. health care program cost shift finance on a daily basis.
Tax and subsidize – the status quo, not change. Govern by appearances, not substance.
The Obamacene, not the Anthropocene defines the New World Order. How ironic that the fear of super control of our lives by right wing capitalists has not happened because what the left eco-green made was blinkered chaos: as long asthe rhetoric is correct, anything goes. “Green it” and walk away. Doing something that improves lives ìs no longer important. Why?
Because all of “us” have already got allthe goodies we want. What’s left to work on is just our social image, the basis for our self image. Strt, proclaim loudly and drink Chardonnay. We’re good, ignore the rest.
BTW, the reason there was such a fuss about making sure the “tax”was returned to the taxpayers is that the taxes that were collected never went to the government. They ended up in the corporate offers and everyone knew it. Subsidies, exemptions and rebates: a government of sound and fury, signifying nothing.
Suprise, suprise. The big corporations were getting a big rake-off which was being paid for by the punters.
This is something that people just do not understand. If you “follow the money”, the single group that benefits the most from carbon taxes, panic over anthropogenic warming and/or “climate change”, increased energy prices in general is (drumroll please!) — the energy industry, especially those parts of the industry that use or provide fossil fuels.
Power companies make marginal profits on what they sell. If you double the price of energy, they make twice as much money. Anything “society” does that raises the price of electricity makes them more money, not less. They are perfectly happy to see any number of restrictions, exceptions, added costs for using e.g. coal to make electricity because they actually can do arithmetic and can see that — barring a breakthrough discovery of e.g. cheap and easy nuclear fusion, the invention of a cheap battery capable of storing 50,000 kwh in 50 pounds of processed silicon that has no memory effect, or the like — there is simply no way in the foreseeable future to do without coal based electricity globally. Even displacing coal-generated electricity with alternatives only makes them more money — a lot more money — as long as the replacement isn’t vastly cheaper in real dollars. It just lets them charge even more for the coal and coal generated electricity so that the coal makes them just as much money for an even longer period of time.
The only thing that makes these companies lose sleep at night is the possibility that somebody will invent a handy-dandy home fusion generator so cleverly built that one pours water in the tank and gets a century’s worth of electricity for an ordinary household out without any additional investment. I’d hate to be the inventor of such a device — one would have to post the plans on the internet and put them directly into the public domain and hope that the fait accompli would deter the otherwise inevitable assassins. But CAGW/CACC is, if anything, funded and supported by the very energy industry that it “appears” to be attacking. It’s just another opportunity to make even more money providing the essential commodity our civilization depends on without the pesky interference of either a free market system or public regulation.
rgb
Leo Geiger said on July 17 at 8:15 ….
——————————————————
There is no successful real world carbon tax solution. It has been pretty well demonstrated by real world scientists that global warming from man-made CO2 is so small against what Mother Nature decides to do that it is inconsequential and that the CO2 increases are actually beneficial to all life on earth. It is plant food, not pollution. Carbon taxes are schemes to line the pockets of progressives with money stolen from tax payers and the companies that provide them jobs.
I’m for the carbon tax as long as there’s an offsetting reduction in income taxes. Because carbon taxes can impact the poor I would implement them over a 20 to 30 year period while offsetting the increase in government revenue with reductions in the income tax rate (I suppose a reduction in sales tax and value added tax would also be indicated).
However, I would also tax methane emissions from industry and agriculture, and co2 emissions from cement plants. The methane emission tax can be implemented as a gradual tax on cattle and other animals we raise for food according to their tendency to break wind. We can also apply a methane emissions tax to rice growers. This will make rice more expensive, but that’s fine with me because I prefer eating ravioli.
Most carbon tax schemes bear more than a passing resemblence to a pyramid scheme.
Fernando Leanme says:
July 17, 2014 at 10:07 am
“I’m for the carbon tax …”
====
Why are you for something that hurts average folks and lines pockets of political friends. There is no justification for a carbon tax.
As an aside would you tax diamonds, pencils, tires, slab wood, Tupperware, farmers cows, etc?
“…British Columbia’s revenue neutral carbon tax for a real world, successful, working example of a carbon tax policy.”
Sure its easy for a Carbon Tax in a place that is 86.3 per cent hydroelectric. The tax was set up to claw money from Alberta.
I actually would not mind a large Consumption Tax at all. But only in trade for no or fixed, low, no returns needed income taxes. Consumption taxes are much fairer. Consumption taxes are also carbon taxes, so all the greens can be happy too.
@Leopold Danze Geiger says: July 17, 2014 at 8:15 am
Leo if the B.C.tax is really revenue neutral, exactly what is the point?
In reality these taxes raise the price of energy which reduces our level of civilized existence. Our advanced civilized existence is predicated on abundant inexpensive energy, get over it Leo !! Don’t put us back to some imagined better times of simple living with less energy.
The BC Carbon Tax is an outrageous fraud and has served only to punish hospitals and schools which have seen their available funds shrink by having to pay this tax. A sneaky way for the Liberal government to reduce spending on education and health care. It is not based on any market value for carbon offsets (which are a tiny fraction of the level set by the Liberals). And as with any tax, there were initial reductions in income tax supposedly to offset the carbon tax which were quickly clawed back ensuring a net gain in revenue (Leo: have you checked your BC individual deduction amount for 2013?)
Leo Geiger says:
July 17, 2014 at 8:15 am
One needs to separate the broad policy from how it is implemented. Poor implementation does not mean the original policy was a bad idea. Again, see British Columbia’s revenue neutral carbon tax for a real world, successful, working example of a carbon tax policy.
####
BS. If the implementation is flawed, then the base process being implemented is flawed. A process must be implementable otherwise it is useless. Generally, the architects of the implementation are also the architects of the policy. If they are incompetent in designing an implementation, then they are most certainly incompetent in designing policy. Lefties always pull this “Flawed Implementation” excuse whenever one of their policies proves to be an undeniable disaster.
“Marxism is good in theory” …. Yeah, right!
The problem with the Aussie carbon tax scheme was that it did not create enough dependencies and special interest groups for the revenue in order to lock in place forever. That was the design scheme of the Waxman-Markey carbon tax bill in the U.S. It included revenue re-allocations to the extent that large blocks of funding could be funneled to inner city organizers among many special interest groups for social engineering. That is why Obama never really gave up on it when his party backed away.