Labor Party Big Economics Idea: Pay $10 billion to *lose* $20 billion more!

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 […]