Essay by Eric Worrall
Hands up who wants to invest in Australia?
Australia will have a carbon price for industry – and it may infuse greater climate action across the economy
Published: March 30, 2023 12.44pm AEDT
Frank Jotzo
Professor, Crawford School of Public Policy and Head of Energy, Institute for Climate Energy and Disaster Solutions, Australian National UniversityAustralia is about to take a big, constructive step on climate change policy: we will have a carbon price for the industry sector, under the safeguard mechanism.
It comes nine years after the Abbott Coalition government abolished Labor’s carbon price. The safeguard mechanism lay as a sleeper for many years – legislated in large parts under the Coalition government, but kept ineffective due to how it was implemented.
The mechanism will become effective as a so-called “baseline and credit scheme”, putting a price signal on about 30% of Australia’s greenhouse gas emissions. It will create a sizeable financial incentive to cut emissions in industry, even though it also relies on land-based carbon offsets.
Under the parliamentary compromise this week between Labor, the Greens and some crossbenchers, the legislation will prescribe that overall emissions from industrial facilities covered by the scheme cannot rise over time.
Implementation of the safeguard mechanism bodes well for future climate policy in Australia. The policy does not have bipartisan support but the Dutton opposition is not vocal about it.
…
Read more: https://theconversation.com/australia-will-have-a-carbon-price-for-industry-and-it-may-infuse-greater-climate-action-across-the-economy-202728
If imposing a carbon tax in itself wasn’t enough to kill coal and gas, the greens are boasting their deal to pass the carbon tax has made future coal and gas projects a lot harder;
…
Making it harder to fund coal and gas | The targets will also be applied to many government agencies. Significantly agencies such as Export Finance Australia, Infrastructure Australia and the Northern Australia Infrastructure Fund will now find it harder to back new coal and gas.
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Read more: https://greens.org.au/climate-crisis
These new costs and attacks on company profits are being imposed in a year the World Bank describes as “A second year of sharply slowing growth”.
A Second Year of Sharply Slowing Growth
Global growth is projected to slow to its third-weakest pace in nearly three decades, overshadowed only by the 2009 and 2020 global recessions. Investment growth in emerging market and developing economies is predicted to remain below its average rate of the past two decades. Any additional adverse shocks could push the global economy into recession. Small states are especially vulnerable to such shocks because of their reliance on external trade and financing, limited diversification, elevated debt, and susceptibility to natural disasters. Immediate policy action is needed to bolster growth and investment, including redirecting existing spending, such as agricultural and fuel subsidies.
Read more: https://www.worldbank.org/en/publication/global-economic-prospects
There is an old proverb, you catch more flies with honey than vinegar. The politicians currently in charge of Australia seem utterly clueless about how businesses make investment decisions.
The politicians in charge of Australia genuinely seem to believe punishing businesses with higher costs, new taxes and energy shortages (when the gas runs out, or the coal plants are decommissioned) will overcome their reluctance to invest in green technology.
The headlines here seem to have no regard for truth at all. Australia’s parliament has not voted to impose a carbon tax. It hasn’t voted for anything along these lines. What the links refer to is a compromise between Labor and the Greens agreeing to limit emissions while allowing new coal mining etc. That is not a tax, and is not a vote in Parliament, where those two groups do not command a majority in the Senate.
Points you missed:
1) The proposed scheme also has support from a number of crossbenchers, which together with the Greens would be enough to see it passed in both houses.
2) To try to pretend that there is no tax involved is a quibble. The reality is that the quota of allowable emissions is set on a declining ratchet that will require the purchase of indulgences to keep operating, or result in closure if that proves uneconomic. The intention is to make it uneconomic for most new projects, and in time to squeeze existing operations out of existence. That indulgences can only be purchased from those who cut activity or through carbon sequestration schemes does nothing to prevent the truth that these businesses are being made uneconomic by the forced purchase of indulgences – a stamp tax.
Again, the headline says, explicitly
“Aussie Parliament Votes to Impose a Carbon Tax”
and nothing in that is true.
Industry will be forced to buy carbon credits to offset their emissions. Carbon credits are just fancy words for carbon taxation.
Parliament has not voted to require that.
If it was a law that was passed by Parliament but lay unused for a time, it was still passed by Parliament. If it is a government instituted cost and imposed by government, it IS A TAX. You may call it a usage fee, or registration fee, or a market directive, etc. but ultimately it is a tax on the populace. If you think businesses pay taxes, shame on you. CUSTOMERS PAY TAXES. At some point, the business may lose customers due to the additional cost imposed by the government and have to close. That in and of itself is what is being applauded by you.
A “tax” will change investment decisions regardless of what it is called by supporters.
“If it was a law that was passed by Parliament but lay unused for a time, it was still passed by Parliament. If it is a government instituted cost and imposed by government, it IS A TAX.”
If pigs could fly …. How about some actual facts? None of your ifs are true.
Why does the Reserve Bank bother to push up interest rates in its futile attempt to reduce inflation, while the federal government does everything it can to push inflation up.
Concerns over ‘carbon tax by stealth’
March 28, 2023 – 11:44PM
Sky News host Jenna Clarke says major coal companies are warning that Anthony Albanese’s deal with the Greens to pass Labor’s signature climate policy is a ”carbon tax by stealth” that will drive up energy prices, destroy jobs and kill foreign investment.
Just an opinion from a right wing Murdoch host.
A government coerced expenditure of cash = a tax. You can quibble all you want Nick, but the net impact on industry will be indistinguishable from the imposition of a new tax.
Eric,
Your sloppiness with truth is self-defeating. If it was really true that “Aussie Parliament Votes to Impose a Carbon Tax” it would be very big news. So most people know that it isn’t, and discount what you say. And when you try to re-interpret it as “Two politicians got together and discussed something”, it just gets nonsensical.
There is no “government coerced expenditure of cash ” , they aren’t even talking about one. They are talking about limiting net emissions of the industry to the current level by only approving new projects that would not breach it.
Your quibbles are meaningless. It’s a tax. A ratcheting down tax allowance does not make it something other than a tax. The impact will be as damaging as if they had been more honest and called it a tax – the people paying this tax are not idiots who can be deceived by political word games.
$75 per tonne, and rising over time. Nick’s notion that that is not a “government coerced expenditure of cash” is quite simply ridiculous.
It will be capped at A$75 a tonne, with that cap rising over time.
Labor caps carbon price at $75 for big polluters
Carbon credits to be capped at $75 per tonne – the Federal Government is also for the first time considering a tariff on imported products made with a large carbon footprint and which do not have a carbon price [so there’s already another carbon tax in the offing]
Nick clearly has no idea what he is talking about.
Under the safeguard mechanism the companies involved HAVE to reduce co2 emissions by 5% a year. New fossil fuel projects are also now slugged with the emissions generated by their customers (I still wonder if they could claim carbon credits for reducing CO2 emissions in overseas countries).
If you cannot reduce actual emissions you will be forced to buy offsets.
It’s not a hard concept that this is an additional cost, but it seems totally beyond Nick’s comprehension.
“Nick clearly has no idea what he is talking about.”
Nobody knows what they are talking about here. Firstly it is Eric with his plain wrong “Aussie Parliament Votes to Impose a Carbon Tax”.
Then people scout around to try to find something that could make it meaningful. The current favorite seems to be a statement back in early January by Bowen, which put a cap on emissions, starting at present level and diminishing 5% a year. Companies that couldn’t make those reductions might have to purchase “indulgences”.
Now this clearly is not what Eric is talking about. It is not current, has not been before Parliament, and is not a carbon tax. For those trying to stretch the facts to fits Eric’s bizarre description, that doesn’t matter. But it does. A carbon tax has a well understood meaning. It is a charge on emissions of carbon. This is not such a tax. Firms that can reduce still have emissions, but pay nothing at all. Those that end up having to pay for their shortfall do just that. They are still not taxed on the majority of their emissions.
Finally the real Nick sticks his head out…”right wing Murdoch” –
So the answer is either pay the fee (not a tax) or buy indulgences (not a tax). 😉
Yep
Bingo
”Parliament has not voted to require that.”
Now I know why they call you nit pick nick.
Nick pardon me if I don’t recall you calling out headlines in the msm about the imminent impending doom facing humanity from global warming.
Your brand of ‘nick-picking’ is very very left aligned.
Is he, therefore, guilty of “misalignment” – surely that is only attributable by the Left/Woke Commissars and therefore only CO2/AWG/CC “deniers” can be guilty…?
Is he therefore very confused about where his head is?
That’s because old mate Nick is a lefty/green climate alarmist. Nothing less.
He gets obsessed and buried in the nuance and minutiae of a discussion – but in the big picture — It is a belief in green sun and wind, capitalist destroying, negative GDP, globalist elite, global de-carbonization, CAGW, that informs all.
And Turnbull’s ghost hovers and helps, trading, trading,
I don’t know anything about Australia.
I just read the stories linked to in the head post. The title of the post is: “Aussie Parliament Votes to Impose a Carbon Tax”.
As far as I can tell there has been no Parliament vote. The headline is flat wrong.
There has been an agreement between parties so that, as the link put it, the Government will now be able to put a measure to a vote and get it through. That is not a vote to impose anything, its not a vote.
So Nick is right about this. If you want to show he is wrong, post the Parliamentary record of the vote, and say when it happened. The Australian equivalent of Hansard, I assume there is such a thing.
He is however on much shakier ground arguing that when and if enacted the measures will not be a tax. They may not be called a tax, but they seem to walk like one, talk like one and quack like one.
“the Government will now be able to put a measure to a vote and get it through.”
They will get it through the House. They will need extra support in the Senate, which they might get, but far from certain.
The immediate reaction from the market tell you its a FF industry destroying TAX. Nothing less. Labor/Greens how to destroy something good. There is no requirement to limit emissions. – None..
You of all people should be able to contextualise this Nick or is some contextualisation more equal than others?
So none of these nitwits realize they are throwing the door wide open for China to do basically all new energy infrastructure world wide. We’ve not completely gone down that road here in the US yet but another term of Gropes or Cackles might do it. Our so called leaders are imbeciles.
“Our so called leaders are imbeciles.”
Yes, they are. The clueless ones have no idea what they are doing. The connivers do know what they are doing. Both groups are harming Australia.
It was always about money.
Australia is like the UK, and the UK is like the rest of Europe. In the USA, we have always hated royalty of any kind, and we have always hated Parliments. So Conservative in the USA means, free market economy and a Constitutional Republic. Whereas conservative in Austrtalia and Europe is just a another name for a degree of Communism.
I don’t see much of what I would consider conservatism in Australia or Europe.
Most of their politicians look like leftists of one degree or another, to me.
Or in the US of A for that matter. The problem with our so-called ‘conservatives’, aka the Republicans, is that liberty and limited government are not their primary goals. From time-to-time they may be able to slow the Progressives down a bit, but ultimately they haven’t been able to change the destination.
The problem with some Republicans is they don’t see the radical Democrats as existential threats to freedom. They treat those who would destroy the U.S. Constitution not as threats but as debating partners.
Yep
That carbon tax will help pay a part of the about $100 billion for the 5 new atomic submarines
The brainwashed elites, who never analyzed, designed, or operated any energy systems, are doing everything to properly screw/mortgage the Australian economy and Australian people in perpetuity.
God bless us all, if that manmade virus were to spread, because it would be far worse than COVID.
China, Russia, India, etc., are laughing all the way to the bank.
China had the largest trade surplus in 2022, Russia was second largest, Saudi Arabia was third largest.
Germany dropped from second, after China, to seventh.
That is called sanctions blowback
Germany didn’t have any oil to sell.
“That carbon tax will help pay a part of…”
There is no carbon tax.
The Aussie parliament voted to impose a Carbon tax, the title of the article
It’s the title. And it isn’t true.
If it was, it would be big news. Any links?
Last time Labor and the Greens legislated a ‘carbon’ tax (you know you’re being fed bullshit just by that terminology), they insisted the tax was just a price on ‘carbon’.
So the whole game they play is akin to pushing a plate of steaming bullshit at you while trying to convince you it’s really a plate of venison ragout.
By the time we eventually get those submarines, they will be the cheapest reliable electricity generators in the country, and we will be wishing we had bought lots more of them.
The thing that upsets me about this is that Bandt and Albanese are such cowards. If carbon taxes are a good idea then they are a good idea for everyone. These hypocrites should not be allowed to pick and choose who carries the water for Australia. You can’t reward your friends and punish your enemies and think you are doing a good thing. The best thing that can happen to Australia is to fail and fail big, people have to really hurt, the sooner the better. Then this nonsense will end, it’s going to end one way or another, let’s not put it off any longer. These people suck.
progressive prices (“taxes”) in a trickle-down economic model
I am sure the Chinese will appreciate the industry that leaves Australia for their shores.
From the referenced report in The Conversation:
“For coal and gas production projects, the mechanism applies only to emissions that arise during the mining of coal and the extraction and processing of gas. It does not apply to the emissions produced when the fuel is burnt for energy, …..”.
What a joke.
This is an indicator of how hard it is to properly discuss simple facts here. The post starts out baldly declaring “Aussie Parliament Votes to Impose a Carbon Tax” which is quite false. Now there is a criticism that a mechanism that is being talked about is too weak.
But as the report says, that is an existing mechanism, which was largely enacted under the previous conservative governments, but not implemented.
Not weak, stupid.
I bet you keep the tide from washing up on the shore just as well as you argue government imposed additional costs on businesses ( which are invariably passed to their customers – geddit?) are not “taxes”….if it quacks it is a …….
Rooftop PVs now have industrial scale presence in the Australian electricity supply industry. For January 2023 their contribution of 13% of generation exceeded the output of wind at 11.4%.
The capping of gas and coal prices has also eroded the income from grid scale wind and solar. Wind was paid $285/MWh last June and down to $59/MWh in March this year.
Albanese and Bowen have created a nightmare that should be apparent mid year.
ALDI have specials on 3300W petrol generators this week – $399. (Maybe a lesson learnt from Germany) That is enough to power the fridge, a few computers, a couple of lights and the flatscreen. If you need heating, you should be looking at a wood burner and visiting the local forest.
“Head of Energy, Institute for Climate Energy and Disaster Solutions”
In an earlier generation, I would have automatically thought this was a new Peter Sellers goofy satire coming to a theater near me. Are these collegiate nimrods so lacking in self awareness that they don’t see the clownishness in it? The “Climate Energy Disaster” is the very ‘Solutions’ they found to replace a robust, cheap and reliable dispatchable energy grid.
Carbon price no longer needed: Albanese
“Mr Albanese told the Press Club a price on carbon was no longer necessary.
“The thing about where we were in 2007 … is that renewables at that time needed support in terms of a market-based mechanism. The fact is that the cheapest form of new energy in this country [today] is renewables. It’s solar and wind. The circumstances have changed.
“Renewables today are looking for a different framework. So if you ask are we going back to the old system, the answer to that is no. We’re looking forward, not backwards. And we’re looking forward at a mechanism that will drive that change through the economy.”” [my bold]
That was 15 years ago. With all the progress since then with progress with wind and solar, there must be even less need now for a carbon price.
Alinsky says it’s OK for radicals to sometimes say things they don’t mean?
Carbon tax – sure, why not?
It is the policy of the Australian Greens that “Australia needs urgently to phase out fossil fuels for export and domestic use”.
They also wish to impose prohibitive regulations that would virtually eliminate all mining.
Fossil fuels account for 43% of visible exports by value (2022) and mineral exports 24%.
Australian productivity fell sharply after the ALP – Greens de facto coalition came to power twelve months ago, living standards for most will follow.
Wind and solar projects create thousands of jobs – all offer no economic value.
The Albanese government will challenge the Whitlam era for inflation.
Australia desperately needs more housing but houses/mortgages are now priced beyond the reach of most workers.
Construction companies are going bust left and right in Australia, because inflation and high interest rates have placed intolerable stress on their businesses. Just the beginning of the Labor economic train wreck methinks.
https://www.news.com.au/finance/business/other-industries/sydney-builder-ajit-construction-company-collapses-into-liquidation/news-story/92487bfa80bd714c8e8b979f9ed8501c
https://www.news.com.au/finance/business/other-industries/queensland-builder-collapses-impacting-at-least-a-dozen-homes/news-story/7f905b00fc35516157079226b411323c
https://www.news.com.au/finance/business/other-industries/two-more-building-companies-collapse-in-nsw-and-queensland/news-story/093ca893692de2edda1c631456919e71
etc.
In America, the greens are trying hard to stop all logging- since, if only we can stop logging and let the trees grow old- that will help save the climate. Of course that’ll drive up the cost of new housing which is already beyond the reach of most of the younger generation.
If all of the CO2 that has ever been and ever will be emitted by Australia was removed from the atmosphere it would have no impact on AGW.
Canada is the same.
> 80% of Canada’s electricity was / is already generated by hydro, nuclear, wind and solar.
But Trudeau insists that Canadians must “lead the way” in reducing fossil fuels emissions.
And so he inflicts an ever-increasing “carbon” tax on the working poor (the numbers of whom since Trudeau came into government has increased exponentially).
Even though Canada emits about the same as Australia does – about 1.5% of world emissions.
The delusion about agw is palpable.
none of these issues are going to matter much longer. the entire western world has castrated itself. China, Putin , India and a whole host of other nations don’t give a damn about netzero. And the United states just officially entered full blown Banana Republic status today. I guess none of these radical politicians have thought about what the world looks like dominated by some of the most evil regimes on the planet- China Russia etc. And then there is the other possibility – world wars are not particularly good of the environment. That’s what will probably happened with a weakened US with wide open borders, insane energy policy wokeified military, need I go on…
Amazing how those carbon credits make everything better.
These really need to be stopped and edited before publication.
They are repeatedly factually wrong.
And when that is pointed out, he doesn’t self-correct.
If only there was a government censorship board you could appeal to…
It’s called reality.
Objective truth matters.
Your version of the truth MCourtney
Truth is not subjective. It is meaning correlating with reality.
“Aussie Parliament Votes to Impose a Carbon Tax”For that to be true there would need to have been a vote in the Australian Parliament.
There wasn’t.
It doesn’t matter what you say or I say. Reality trumps your headline.
“Implementation of the safeguard mechanism bodes well for future climate policy in Australia”
It may bode well for climate policy but it doesn’t bode too good for Australians.
I’d like to know how much of these carbon taxes, Green Fees actually go to CO2 reduction or developing Green/Economically Sensible Renewable Technologies.
What I’ve seen is NONE of these taxes/fees are “allocated”. They all go into general revenues, a portion of which could be said to pay for Green policies.
Allocation of tax revenues is eminently doable. Set up a bank account and direct the specific dollars the tax raises to it. But governments won’t tie their hands in part because they all use deficit financing. Really, the additional Green policies use additional debt financing.
The MSM doesn’t point this out. Possibly because their own firms use debt financing for even operational costs (debt increases by the year is the proof.
The argument for Green debt financing is that money spent today reduces costs tomorrow, so that future improved “profits” will pay down today’s extra loans.
Of course this is a farce, as the Greens have no intention of running balanced, not even in-the-black budgets. Not that they care, as they are infected with Modern Monetary Theories, which posit all money is an illusion (true) and that printing more money (digitally) solves any interest-and-principal deficiency ….. as long as the consuming public believes the newly printed money has the approximate value of the previous money. Which the current run on Western banks shows is not true.
What will it take to bring fundamental positive economic principles back to government programs? These days,I’m not sure anything other than a national war will do it.
The ruling elite need to stay rich. There’s only so much “activity” a nation can sustain. When the previous “surplus” of activity is absorbed in a war program, there isn’t any left for what the Green programs needed. That’s when renewables collapse along with Green programs that can’t compete with nonGreen ways. But the ruling elite are, by then, fully integrated into the war program, so their wealth (and power) remains.
There’s a long, dark tunnel ahead to traverse before rational goverance has a chance ….
Politicians are made of mostly carbon. Will sacrificing them suffice?