JoNova

A science presenter, writer, speaker & former TV host; author of The Skeptic's Handbook (over 200,000 copies distributed & available in 15 languages).


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Carbon tax and Sydney Uni economics, both slugs on the economy

Michael Harris,  Senior Fellow in the School of Economics at University of Sydney, has the impossible job of defending the monstrously ineffective carbon tax against the pointless-but-efficient “Direct Action” program. The carbon tax cost $15b, and cut emissions by 12 million tonnes. The Direct Action plan cost $660m, and is projected to save 47 million tonnes.

Having no numbers remotely on his side, Harris goes quantum semantic. Watch the leap. A tax is not a cost, only a transfer. That makes your tax bill so much easier to pay:

There is also a difference between costs to the economy, and transfers within it. The amount of revenue raised through any tax is not a cost; it is simply a transfer from one “pocket” to “another”. The money has not been destroyed, and it remains available to be spent on something.

Now it seems to me that if I buy a beer, it’s a transfer from one “pocket” to another pocket and if that money is destroyed in the process, that would be the end of the bottle shop. The world of economics rather depends on that money not being vaporised and being available for the shop owner [...]

The free market wins again – carbon auction price is $14 per ton — up to 300 times cheaper than Carbon Tax

Landfill gas

All the usual suspects declared it could never work. Instead, “Direct Action” is likely to be wildly cheaper and more effective (at reducing CO2). The catch is, it won’t reward friends of big-government and it won’t punish miners, manufacturers and small businesses –  which must be why climate activists don’t like it.

Results are just in from the first Abbott government Direct Action carbon auctions. The government offered to pay for carbon reduction, and held a reverse auction (where people who bid the lowest price would win). The average price came in at $14 a ton.

The Numbers: The Australian government will spend $660 million to reduce emissions by 47mT. These projects will run for about 7 years, and mean the government is on track to meet the target of 180mT reduction by 2020. — Details are at the Clean Energy Regulator.

It’s a lot less than the fantasy schemes that use wind and solar power, of which cost estimates vary partly because no one really knows what the lifespan and disposal costs are. One MIT study estimated the cost of abating carbon with wind was about $60 AUD per ton, and the cost of [...]

Finally! Carbon Tax Gone – Australia gets rid of a price on carbon

As of today, Australia no longer has the most expensive “carbon” price in the world. The voters didn’t ask for a tax in 2010,  but it was forced on them in 2011. They rejected it wholeheartedly in 2013 but it still has taken months to start unwinding this completely pointless piece of symbolism which aimed to change the weather. The machinery of democracy may be slow, but this is a win for voters.

11:15am EST today: The Australian Senate passes the carbon tax repeal bill.

“Australia has become the first country in the world to abolish a price on carbon, with the Senate passing the Abbott government’s repeal bills 39 votes to 32.“ SMH

Now we need to turn off the tap to all the other green gravy rent-seekers who ignore the evidence.

h/t Matthew (aka Matty thanks!)

Other news services are starting to cover this.  All the cross-benchers except Nick Xenophon (who was absent) voted for the repeal. Labor and the Greens opposed it. News.com

Soon big companies will stop paying a penalty on carbon emissions, currently just over $25 a tonne, ending Australia’s most controversial policy implementation since the 2003 decision to join the Iraq invasion.

Labor [...]

Tic-tic-tic: Carbon tax repeal goes to Australian Senate (track that progress)

UPDATE Thursday: DONE Success at 11:15am this morning in Canberra. The Carbon Tax is gone.

UPDATE: Weds — This could take days. The repeal was before the Senate this morning. Labor and the Greens are “dragging the debate out” with speeches. “Filibustering” according to Finance Minister Mathias Corman (The Australian). More debate is due tonight. But the Senate has agreed to extend sitting hours after Friday and keep coming back until this is resolved. They were due to start a 5 week break on Friday. (See Sky News too). This doesn’t look like being resolved today. (SMH)

Sydney Morning Herald:   It [The government] was concerned that while all eight cross-bench senators say they are committed to consigning the carbon tax to history in a final vote, as many as three might baulk at the use of a guillotine to bring an end debate and force that vote.

In a further sign the government had lost exclusive control of the legislative timetable, the Climate Change Authority bill was removed from the list of those to be considered, supposedly at the insistence of the PUP.

Sources said the CCA bill, the purported vehicle for Mr Palmer’s proposed ”dormant” [...]

The Carbon Tax saga goes on: What game is Palmer playing?

Clive Palmer, the coal mining Billionaire and his three (or four) PUP Senators have voted down the Carbon Tax repeal they said they would pass. It was quite the blockbuster day in Australian politics. They supported the government move to bring on the vote at 11:45am today, then decided not to vote for the repeal bill. They hold the balance of power. The carbon tax is still law. It may get voted on again by next Thursday, but if that fails, it won’t be voted on again til August, and millions in carbon tax payments are on the line.

There are at least three version of why the bill failed (the same thing happened the day Palmer met Gore). Sky News suggests PUP wanted to change their amendments. According to News.com, Palmer says the amendments put forward by the Coalition were older ones, and not the newer ones the Coalition agreed to, and he claims the government pulled a “swifty”. In an article in The Australian,  it appears the problem was that the amendments were not circulated at 8.30 this morning. Given that Palmer has been known to feed scurrilous versions to the media, perhaps the confusion here is no [...]

$7b paid in carbon tax to reduce CO2 by 0.3% and cool us by zero degrees

This news was so boringly predictable I almost didn’t post it, but numbers like this of actual outcomes of visionary Big-Government Experiments are hard to come by.

Seven billion dollars works out to $350 per person, and $1,350 per household of four, for one year. If Bill Shorten (leader of the opposition) had to knock on doors to collect this tax, there would be a riot in the street tomorrow.

The Australian reports that the $1,350 from your house for the year to Sept 2013, produced an emissions fall from 543.9 million tons all the way down to 542.1 .

National greenhouse accounts to be released today show carbon emissions fell just 0.3 per cent in the year to September 2013. This was despite the carbon tax raising $7 billion over the period.

But I hear some cry that it did help reduce emission from electricity:

The Department of Environment figures, obtained by The Australian, show electricity emissions fell 5.5 per cent or about 11 million tonnes in the year to September.

However virtually none of the 11 million tonnes “saved” had much to do with the carbon tax. About 5 million tons was due to reduced economic activity (arguably, [...]

Breakthrough: Labor Party discovers perpetual fountain of cash

The Labor government recently promised to reduce the price of carbon from the world-record-high of $25 a ton to a probably-could-be might-look-like $6 a ton price, as it switches (possibly) from a Carbon Tax to an Emissions Trading Scheme.

The compensation that was promised to offset the Carbon Tax will still be paid to voters, even though the Carbon Tax might end. Thus bread and fishes will be supplied, but hardly anyone will have to bake or fish. The innovation comes thanks to the impending-electron-factor — a strange combination of the Fibbs-Boson*, and a Poll flavored Quark.

Bonus for families as price of carbon falls

 by: ADAM CREIGHTON, From: The Australian

July 20, 2013 12:00AM

THE Rudd government has banked massive overcompensation into the federal budget for at least the next six years, if the carbon price fails to meet Treasury’s optimistic price projections.

More than 80 per cent of households will be overcompensated for the effect of the proposed emissions trading scheme by between $140 and $410 a year in 2019 if the price of carbon permits only rises to $10, new modelling shows. Even if the price of carbon reaches [...]

Game Changer? EU carbon price hits “Junk Status”. (Australian Govt hits $10b Black Hole)

The EU is a basket-case, teetering, so when the European Parliament had the chance to “fix” the carbon market yesterday, they surprised everyone and chose not to. Being unfixed, it’s free to collapse, which it did and by 40%.

The Economist headline today is “Carbon Trading Below Junk Status”.

The EU carbon market once was around €22/tCO2 (that was 2008). Australia turned up five years late to the party, and is still trying to trade at similar rates.

Today Point Carbon is listing the carbon price as “€2.80“.  Obviously, subject to change, and possibly trending-to-zero.

[BusinessTimes] “Campaigners and traders warn the carbon price could now fall below 2 euros or even to near zero in the coming weeks, and government sales could fail if they don’t meet minimum price requirements, as banks that act as liquidity providers pull out.”

 

The EU carbon market is not dead yet, but this could be a game changer

[The Economist] The rejection [of the bill to rescue the carbon market] was a surprise. The parliament’s environment committee had looked at the plan in February and approved it by a surprisingly wide margin of 38 votes to 25.

Kyoto: Australia “IN” New Zealand “Out”

 

New Zealand signed up for an emissions trading scheme in November 2009, fully expecting Australia to sign in an ETS the next week. Thanks to one vote and an Abbot win, Australia didn’t sign up then, but will get one (unless things change) in 2015.

Kyoto 1 ends in December 31, 2012, and not a moment too soon. Last week Australia signed up for Kyoto 2, but this time New Zealand  didn’t.

[Reuters] Neighbouring New Zealand said it would not sign up for the next phase and would instead join a separate convention, including large greenhouse gas emitters such as the United States and China.

Kyoto 2 will only include 15% of emissions. The New Zealanders didn’t want “in” with such a small ineffectual crowd, and will wait for the US and China.

[Reuters] Australia in July introduced a A$23 ($24) per tonne carbon tax on top polluters, which will move into an emissions trading scheme from mid 2015. Australia and the European Union have agreed to link their trading schemes by 2018.

New Zealand’s abandonment of Kyoto 2 followed changes to its emissions trading scheme (ETS), which allowed unlimited use of carbon credits to meet targets at near-record [...]

So much for certainty? Just two months later, Australia starts changing the carbon tax.

The Australian Government,via Greg Combet, announced this week that Labor’s version of certainty is the kind that is un-certain. For two years they’ve been emphatically declaring that “Australia needs certainty” or it’s variant, “Business needs certainty” . (Right before that, they were emphatically declaring that “There will be no carbon tax”, so later, when they did exactly what they said they wouldn’t do, we found out what certainty means to the Australian Labor Party. It isn’t the kind of certainty that helps business and voters “establish beyond doubt” what a vote for a Labor Government means.)

While people are saying we have now linked Australia’s carbon “price” (from 2015 onwards) to the EU market. In effect it was linked before, as I mentioned here. Now that link is rearranged. Previously Australian companies could buy ultra cheap EU options but had to top them up to the floor price, but now they won’t have to pay extra to lift it to $15/ton.

Mr Combet said the government was not considering any other changes to the scheme.   [Source: The Australian]

Yes, and we believe him don’t we?

Things are slightly more sane than they were last week, but the [...]