This is about what it adds up too: If the carbon tax costs us, say, $10 billion a year (anyone have a better number?) we not only have to pay that, but we might lose another $20 billion a year as well.
As I’ve said before, you can’t compensate the nation. There is no productivity gain, no win, no efficiency improvement. There is no bigger pie if you have to cook with leather.
Treasury likes to pretend that the rest of the world is “joining” in the carbon schemes, and that by 2016, the US, Canada, Japan, Russia, China and India will have changed their minds and legislated a carbon price.
The Minerals Council of Australia wasn’t convinced that was a good plan, and asked the Centre of International Economics to analyze the Treasury modelling on the carbon price. The Treasury wouldn’t let them. (Who do they think owns the models?) Instead the CEI had to do their own modelling.
They are apparently the first to try to figure out what might happen in Australia if the rest of the world doesn’t leap head-first and suicidally into carbon pricing schemes.
The CIE finds losses that are 6 times greater:
- That while the Treasury says Australians will lose 0.3% of GDP by 2020, the CEI model suggests we’ll lose 2% of GDP by 2020 (per year).
- So Australia will be not just $32 billion poorer* by 2020, but $180 billion poorer (about $20 billion poorer per year.)
- Where the Labor-No-Business-Experience Government says investment will drop by 0.4%, the CIE put it at a 3.4% fall.
The good news just keeps on coming:
- Real wages could fall by nearly 2% instead of just 1%.
- The average household could lose, not just $5,000 in savings, but $11,000 (or so, it is a model after all).
- Electricity could rise by 30%, and not just the 10% the Treasury estimates.
Remember the Treasury estimates are the ones used to calculate the compensation.
Read the whole MCA report for more light entertainment.
Meanwhile there is light. Today, the Irish announced they are shifting away from climate action too (good for them).
PS: Brace yourself — Tomorrow parts of Australia will be hit with gratuitous displays of condescending smuggery, as the Carbon Tax passes the Senate. Suggest turning off their ABC.
*That’s poorer than they would have been (by 2020) if Business As Usual occurred instead of the Tax on Everything that Moves.