Yet another tax!? Aren’t we are already overtaxed?
This is a reasonable argument and it could be very hard on the economy. A Carbon Tax on fossil fuels will lead to increase in energy cost, which would discourage investment, and lose jobs. A carbon tax would provide a good price mechanism to encourage the use of low emission alternatives, e.g. natural gas and renewable energy.
For Australia, it is necessary to carefully consider the new tax before getting involved in carbon trading scheme so that the business remains competitive. Prime Minister John Howard has signaled that Australia is likely to be involved in a carbon trading scheme to help tackle climate change and he has promised to protect miners and power station workers if Australia joins such an agreement.
The coal industry in Australia employs more than 30,000 people, including 18,300 in Queensland. There is a massive increase in employment in Queensland’s coal industry since last year.
The notion that a $12-$14 carbon tax would have only a ‘small’ impact on the Australian economy is simply wrong. The report itself shows that Australian households would automatically face higher annual electricity bills from 2010. Businesses hit by a new carbon tax would be forced to increase prices for consumers. Higher prices would reduce demand and depress investment in industries, which many thousands of Australians rely on for their jobs and livelihoods. And, Australian export industries facing this tax would be disadvantaged compared with their international competitors.
We already know that New Zealand was forced to abandon plans to introduce a carbon tax of about $NZ15 due to concerns over the potential adverse effects on its economy.
ABARE concluded that:
Unilateral action to achieve deep cuts in Australia’s emissions is estimated to cost the Australian economy significantly more than not undertaking that action and offers no perceptible additional benefits to the rest of the world – neither in economic terms nor in terms of global environmental benefits
Professor at the Australian National University’s Centre for Applied Macroeconomic Analysis, Warwick McKibbin, says a carbon-pricing scheme is preferable to a carbon tax. He said:
If it’s just purely just a carbon tax, the price of energy is likely to rise because the price of carbon, which is a critical input into Australia’s energy production, will go up.
However, Professor McKibbin says carbon pricing can impact on jobs.
It can actually reduce jobs in the carbon intensive industries and it will increase jobs in the industries which don’t produce carbon, like renewable energy.
Via: ABC News Online