WSJ Online

Not exactly a vote of confidence:

The plan is economically damaging enough that even the normally timid business lobby—many of whose members originally supported climate-change legislation—is speaking up. Opposition leader Tony Abbott slammed the plan as “socialism masquerading as environmentalism,” and he has a point. The government plans to use some of the carbon tax receipts to triple the income threshold before the income tax hits. In other words, this is in part a scheme to redistribute income from energy users to Labor voters. It is an odd kind of tax reform that narrows the tax base.

All of this for negligible environmental benefits. Australia emits 1.5% of the world’s greenhouse gases. Even if the country cut its emissions to zero, the move would do little to reduce global emissions. Australia’s per-capita emissions are high compared to other developed nations because it’s a sparsely populated continent blessed with an abundance of natural resources. Aussies have developed profitable, world-class natural resource and energy businesses that have lifted incomes at home and helped supply developing countries like China and India. This is bad?

It is if you believe in the theology that loathes carbon fuels and wants government to allocate the means of power production. In a speech Thursday, Ms. Gillard vowed to press forward with cap and tax and said that her convictions are “very deeply held.” We’ll see if her government can survive them.

Read it here.

Climate sense

The highly esteemed blogger Luboš Motl (The Reference Frame) has contributed to the Aussie carbon tax debate:

To summarize, my quantitative analysis is meant to show that AUD 23 per ton makes no real difference to the consumption of fossil fuels – and surely not for the climate – and it’s just a step for the carbon fascists to test how much they can afford to harass the society (and they want to terrorize it much more in the future). They will surely steal millions out of this scheme and some of these parasites will be able to make a living but I want to assure the Australian readers that as long as the price is just AUD 23 per ton, it will not kill the Australian economy. It will just make all sources of energy 5-10 percent more expensive and steal a few hundred of corresponding dollars from your annual income. Nothing will detectably change about the CO2 emissions.

If the carbon tax were supposed to make a difference, it would have to be $700-$1,400 per ton. In that case, most of the world population would go extinct because just for breathing, an average human would have to pay $300-$700 per year of a carbon tax. For billions of people, such an annual fee would automatically mean that they will starve to death. If someone wants to remove most of the human contribution to the warming in the 21st century – something like 0.5 °C – by a carbon tax, he will surely have to introduce a carbon tax that will kill billions of people.

Is that really a good decision? Or is it legitimate to charge the people who promote carbon regulation with their planned crimes against humanity? I am sure that no country will be able to introduce a $300-per-ton CO2 tax. The likes of Gillard who would try to do so would be rightfully assassinated as soon as they would propose a $100-per-ton or so – that’s about the critical point.

Read it all.

Still from advert

All paid for by your taxes. You can bet that it will be a campaign of misinformation and lies, with frequent use of phrases such as “carbon pollution”, “clean energy” (as if CO2 isn’t “clean”), and nauseating and mawkish “children and grandchildren” moments. And you can bet that it won’t say anything about the effect on the climate, which we all know is sweet F.A.

One thing we can be absolutely sure of, and that is they won’t be wheeling out Carbon Cate or any other moonbat celeb, not after what happened last time:

PRO-CARBON tax television ads to be unleashed on Australia tonight are part of a $25 million taxpayer-funded campaign to win over the public as the Gillard government struggles to explain its message.

The advertisements will cost $12 million but the total bill for the government to explain its climate-change policy will cost more than $25 million, with figures in budget papers showing the government has earmarked an extra $13.7 million for a ”public information” campaign on the tax.

This would be used to fund websites, leaflets and other publicly available information on the details of the government scheme, a spokesman said.

It is understood the television advertisements feature real Australians who work in large and small organisations and are involved in creating a clean-energy future. People appearing in the ads were not paid or given scripts.

But the government faces competition in the advertising stakes.

The Sun-Herald has learnt the Australian Trade and Industry Alliance will launch a $10 million anti-carbon tax advertising campaign this week, which is backed by the coal industry and the Minerals Council. It is understood a long-time Liberal Party pollster, Mark Textor, is the architect of the testimonial-style ads, which follow a similar print campaign in newspapers last week.

With polling showing the government holds a primary vote of just 27 per cent – the lowest in recorded history – and personal support for the Prime Minister, Julia Gillard, also in uncharted territory, Labor has embarked on a fierce campaign in the electorate to sell its carbon tax policy. The Coalition leader, Tony Abbott, has also led his MPs and senators in hitting the streets to oppose the tax. (source)

From the small clip I have managed to see of one advert, it features a comparison between the introduction of the carbon tax and the Industrial Revolution (no overhyped exaggerations there, clearly…). Immediately, one can see that is a nonsensical comparison – the Industrial Revolution managed to lift millions of people out of a life of miserable poverty and towards one of relative comfort thanks to power provided by cheap, fossil fuel energy.

The carbon tax will do precisely the reverse, sending people back towards poverty by making the energy we all need way more expensive. Oh, and for no benefit to the climate, either.

This is going to be a bitter fight to the political death – and I think I know whose death will be the result: the one on 27%.

Henry Ergas

Henry Ergas in The Australian exposes the ridiculously optimistic basis for the government’s carbon tax modelling:

THE one thing you need to know about Treasury’s modelling of the carbon tax is this: it assumes that by 2016, the US and all the other developed economies that do not have carbon taxes or emissions trading systems in place will have them up and running.

This implies that in next year’s US presidential election, likely to be fought at a time of high unemployment, the winning candidate will campaign on the basis of introducing a carbon tax that will go from zero to $30 a tonne in a matter of months. And that tax will then not only get through Congress but in record time.

Moreover, that feat accomplished, by 2021 China will sign up too, and with 14 per cent of the world’s population and barely 20 per cent of world income, will agree to shoulder 34 to 35 per cent of the costs of global mitigation. As part of that deal, China’s leadership will accept a fall in national living standards, relative to business as usual, of between 5 and 10 per cent, while per capita incomes in the far wealthier US and European Union decline by a fraction of that amount. And with China on board, the rest of the world will join the party. (source)

Yep, looks pretty realistic to me.

Seriously bad

Mulling over the mess we find ourselves in, it occurred to me that there are several other reasons (apart from those most frequently discussed) why a carbon [dioxide] tax is a very bad idea.

• The US economy is in strife. Unless congress can agree an increase to the borrowing ceiling, things could get very bad, very quickly, dragging the global economy down.
• The EU is in strife. Greece is on the verge of default, Ireland’s finances have junk status, Italy has joined the queue next in line, after Spain and Portugal, waiting for a handout. If the worst happens, the European currency could be blown apart sending the economy into a tailspin, again, dragging the global economy with it.
• I am of the old school that believes that drastic reforms should only be undertaken when a government has a clear and unambiguous mandate to do so. Minority or shaky coalition governments should do nothing that rocks the boat – their job is little more than to keep the country on the straight and narrow. But here we have a government with a wafer thin majority thanks to a couple of independents and a Green, undertaking the biggest wholesale reform of our economy since the GST. Only when a government has a substantial majority and a clear mandate should it embark on such major reforms.

And despite all of these issues, and all of the well-rehearsed ones as well, the government ploughs on regardless. That is because it has, at every turn, placed its own survival above what is in the country’s best interests – the worst possible crime of a politician.

UPDATE: Add to the list the fact that consumer confidence in Australia is sinking fast.

UPDATE 2: An opinion column in The Australian on 15 July covers the same ground.

Click to enlarge

Australia’s huge reserves of fossil fuels mean that a carbon tax is just about the worst possible thing anyone could do to our economy. Congratulations Julia!

IF ever there were a single country in the entire world spectacularly unsuited to be the sole imposer of a vast, unprecedented carbon tax, which no other country in the world is remotely duplicating, it is Australia.

Isolated from our strategic friends, far distant from our biggest markets, a member of no natural trading bloc or customs union, we have just one serious, competitive advantage in the global economy.

That is the abundance of our fossil fuel endowments. If ever there were a nation well advised to move slowly and carefully on policies to cut greenhouse gas emissions, we are it.

As Productivity Commission head Gary Banks commented: “It will not be efficient from a global perspective [let alone a domestic one] for a carbon-intensive economy, such as ours, to abate as much as countries that are less reliant on cheap, high emission, energy sources . . . Modelling aside, it’s common sense that achieving any given level of abatement is likely to be costlier in a country with a comparative advantage in fossil fuels.”

Banks here did something extremely dangerous. He pitted common sense against economic modelling. Part of the economics profession has gone weak at the knees because the government has labelled its bizarre new amalgam of vast new taxes, huge new bureaucracies, massive expenditure churn, endless new regulation, huge government subsidies for preferred companies and wildly unrealistic targets, a “market-based mechanism”.

The government’s carbon tax does not pass the commonsense test at any point. To call $8 billion in new taxes in the first year, and new government expenditure so great that it exceeds even the new tax intake, a “market-based mechanism” and economic reform just illustrates George Orwell’s insight that if you control the language, you can convince people that black is white and up is down.

The whole enterprise is built on a falsehood, the supposition that nations around the world are taking comparable economy-distorting actions to that proposed by the Gillard government.

There is no really polite way of putting this but it is simply, utterly and comprehensively untrue. This is critically important. Even if you accept that all the science about climate change is true, that does not indicate what the best response for Australia is. If the science is true, then the problem can only be tackled by global action. If global action is impossible, then nations should do their best to cut greenhouse gas emissions in ways that don’t hurt their economy too much, prepare for adaptation when it’s needed and work to produce technological breakthroughs that allow lower emissions technologies to work and become affordable. This is broadly what other nations are doing. None is doing anything remotely like our carbon tax. (source)

And an economist dares speak the plain and simple truth (and we hope more will say the same):

AUSTRALIA could shut up shop and move all of its people to Antarctica and it would have little or no impact on climate change, says Griffith University economist Ross Guest.

“In terms of the world’s carbon emissions, Australia contributes 1.5 per cent,” Professor Guest said.

“So the carbon tax will have no effect on global warming.

“What Australia does makes almost no difference.” (source)