What’s a Carbon Tax and What’s Wrong With It?

Ms Gillard’s Carbon Tax Explained – Just the facts by Matthew King at BigPond MONEY

It starts with a tax

From the 1st July 2012 around 500 of the biggest emitters of carbon pollution (carbon dioxide, methane, nitrous oxide and perfluorocarbons from aluminium smelting) will be required to pay a $23 tax, via a permit system on every tonne released into the atmosphere.

Industry categories affected include electricity generation, stationary energy producers, mining, business transport, waste and industrial processes.

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What is ‘Carbon’ or ‘Carbon Pollution’ and why is it bad?

The ‘Carbon Tax’ or ‘Carbon Pollution Tax’ is a tax not on carbon soot or industrial pollution as the name misleadingly suggests.  It is a tax on emissions of primarily the pure gas, carbon dioxide (CO2) and a few other less important gasses. CO2 is the gas that gives the bubbles in your beer, is the gas we exhale, is the trace gas in the atmosphere essential as a food for plants to grow and is the by-product of burning fossil fuel such as coal or petrol.

Co2 is a trace gas making up only 0.035% of the atmosphere. It is emitted mostly by natural processes with man’s emissions adding annually only <4% to nature’s 96% emissions from algae and decomposition. Man’s emissions over time nevertheless appear to have raised atmospheric CO2 by about 25%.

CO2 is a gas, which a decreasing majority of scientists fear, could cause dangerous global warming. Most scientists agree man’s CO2 alone may cause harmless climate warming of <1ºC by 2100 through simple physics.  Alarmists however point to computer models which raise a possibility, that this mild warming could evaporate more water increasing the height of moist air in the atmosphere, and rather than simply creating more clouds and rain, instead amplify the carbon dioxide warming by a factor of three and cause possibly dangerous global warming.

This danger has been exaggerated (1234) by activists to spur action, but is, in fact, only seen in the extremely complex and incomplete computer models, which are not fully open to public scrutiny,  and which the scientists themselves warn have many uncertainties. Many independent, well qualified scientists (Open letter by 141 scientistsJ.Christy Submissionshort videos) argue that real world data over past 10 years has disproved these climate models and that new research suggest that natural factors are main controllers of climate, not man’s CO2.

Over the past 20 years, a trillion dollar climate research, environmental and business industry has grown on taxpayer subsidies and now, through no fault of their own, relies on our continued belief in dangers of Climate Change to maintain their very existence. With growing doubt about the science, surrogate reasons to reduce CO2 emissions are found: clean energy, green jobs, energy security, then empty rhetoric like that of Julia Gillard – to be “on the right side of history” and finally emotional strings are puled: ‘give the planet benefit of the doubt’ and ‘act now for the children’s sake’.

UPDATE: An excellent summary article by a professor of physics, William Happer. Cyrus Fogg Brackett Professor of Physics at Princeton University:  The Truth About Greenhouse Gases. The dubious science of the climate crusaders.

What is a Carbon Tax?

A tax on businesses and manufacturers of $23, rising over years eventually to probably $80 for each tonne of CO2 emitted from the fossil fuel used both directly and indirectly by manufacturers and businesses and all transport fuel. Since energy is used in all products and services, the tax will make virtually everything more expensive.

What is the purpose?

Firstly, it is political – in a deal with the Greens party to allow Julia Gillard to cling to power, and to appease green-leaning Labor constituents.

Only secondly, is it supposedly to reduce Australia’s CO2 emissions by 5% (on the 2000 level) by 2020, promised by Australia to the UN.

The tax aims to progressively raise the cost of using fossil fuel energy in Australia. Initially, it is argued to improve efficiency, but energy is already expensive with a 50% rise in electricity prices in recent years, giving plenty of incentive to businesses and households for simple efficiency improvements.  The cost of fossil fuel energy will therefore rise until it becomes so expensive that we either use less of it or it becomes cheaper to build the huge renewable energy projects with today’s technology to replace fossil fuels. Thus while the Carbon Tax will start at $23 per tonne, it would have to rise to about $80 per tonne to make renewable energy competitive. But many say it will not work as intended due to many reasons.

Even environmentalist Bjorn Blomborg says, there is no hurry; carbon tax will only force us to spend all our money rolling out patently inefficient current alternative technology, when smaller investment in research would give more innovative and much better and cheaper solutions in a few years.

Most foreign governments have realised this – the big CO2 emitting countries having changed their minds at the Copenhagen meeting on the need and wisdom of putting the kind of price on CO2, needed to substantially reduce its emissions. Kyoto protocol will not be renewed, EU countries have, in fact, started to frankly abandon even their cosmetic carbon prices, France dumped their Carbon Tax last year reportedly to avoid damage to their economy, SpainGermany and Italy have all drastically cut their hugely expensive solar rebates; the Dutch just abandoned EU targets for renewable energy in March 2011.

How will it effect me?

Taxed industries will pass their costs onto you, and you will pay more for everything, some Australian industries and jobs will go oversees and Australia will be poorer, delivering worse services to you and your children.

Energy is used everywhere in society, so all goods and services, including electricity, food and transport will be more expensive, and increasingly more so; they have to be, for the tax to change our behaviour and that of businesses. GST will be further added on top.

Australian industries and wealth will be diminished, as our economy depends highly on coal for energy, compared to say, France, which has 56 nuclear plants, generating 76% of her electricity. Australia will loose industries and export markets to the many countries not burdened with significant tax, such as China, India and USA.

10 top reasons why Carbon Tax is wrong and utterly pointless

It is a green ideological tax for social engineering under the guise of dangerous climate change. It is unnecessary, ineffective, and hugely damaging to Australian families and our industry.

1.       Deceitful: Julia Gillard pledged before the election to not introduce a Carbon Tax. Our government must not be allowed to contemptuously disregard key pre-election pledges to not introduce contentious revolutionary schemes, if elections are to have any meaning.

2.       Misleading: The Carbon Tax or Pollution Tax is a tax on a pure gas, carbon dioxide or CO2, not carbon soot or general pollution, as dishonestly implied by these terms. CO2 is not pollution and does not need to be reduced in the first place, it is a natural trace gas we all exhale and is needed by plants to grow, notwithstanding its greenhouse effect.

3.       Unnecessary: Fear of dangerous Global Warming from man-made CO2 is dissipating with more recent scientific evidence and exposure of much bias, exaggeration of dangers and neglect of benefits of warming in existing scientific consensus. Any warming from CO2 is likely to be a harmless < 1 Deg Celsius by 2100. Higher predictions are only computer model speculations, arguably due to the modeller’s confessed ignorance of natural climate cycles.

4.       Obsolete: Most big countries are retreating from carbon pricing and from the many ineffective and expensive green schemes. These schemes have not even achieved net CO2 reductions,  nor created net green jobs or economic benefits as claimed by proponents (Spain, Germany, USA etc).

5.       Isolated: Big emitter countries such as China, Japan and USA have decided against renewing the Kyoto Protocol or significantly cutting their CO2, despite greenwash projects. Australia’s isolated sacrifice is thus utterly pointless.

6.       Worthless: Even if CO2 were dangerous and we reduced it successfully in Australia or even globally, there is no physical evidence that it would have a significantly beneficial effect on climate.

7.       Ineffective: Economists predict that a carbon price in Australia will just move carbon emissions to the other countries with smaller or no carbon price, especially as we export ever more coal to be burned elsewhere, termed ‘carbon leak’; this is what happened in Europe under Kyoto protocol.

8.       Disingenuous: If Greens really believed a Climate catastrophe was approaching, they would surely concede to the lesser evil of building more dams and more nuclear plants. In fact, theirs is a primarily political agenda.

9.       Damaging: After Labor’s record of green and general disasters of insulation bats, solar rebates, cash for clunkers, green loans, BER, Hospitals and NBN, it is optimistic in the extreme to expect anything but a disaster to come out of the complex Carbon Tax.

10.   Premature: Conversion to a self-sufficient, renewable energy based economy should happen as technological developments bring efficient solutions, not by forcing gigantic schemes using current inefficient technology with huge public subsidies.

Top Reasons given to justify a Carbon Tax:

Fights global warming – no it does not. No one has calculated how much or even claimed this tax will have any effect on climate whatsoever – essentially nil, zero. Not by Australia on its own, nor together with other countries in any conceivable scenario. It’s a huge Tax with zero effect on the claimed problem. What it does certainly do, is advance the Green’s social agenda of telling you how to live by their beliefs. (For example, even if the Tax successfully reduces Australia’s CO2 emissions by 5% by 2020, IPCC theoretical climate ‘cooling’ would be 0.00004 ºC; if the whole world joins in, it would be a negligible 0.0005 ºC).

Pushes economy to clean energy – CO2 is not ‘dirty’ and energy sources should be addressed by technological innovation and markets, not by forced social engineering.

Weans the west off middle east oil – this is a desirable political and technological issue, but the huge cost and damage from the Carbon Tax can only be justified if it is essential to save the world from Climate Catastrophe.

Discharges our international obligations – this should not have been signed up without public discussion and bipartisan support, as arguably they are a power grab by the UN.

Creates Green Jobs – only after destroying 2-3 normal jobs for each green job and permanent green jobs are mostly administrators, auditors, bankers, lawyers,  i.e. bureaucratic.

Creates new green industry for export – oversees experience shows green industry survives primarily on large taxpayer subsidies, is extremely expensive (e.g. solar panels) and tends to be rorted.

Acting now is cheaper than acting later – There is no believable economic evidence of this. Realistic mitigation costs dwarf costs of any damage and adaptation that may be required if any likely warming scenario occurs.

Climate tipping point will fry and drown countries – No scientist seriously postulates this theoretical scenario – only Green activists. Earth has had much larger climate and CO2 swings without runaway warming.

We should listen to IPCC and UN – When was the last time Labor mentioned the IPCC? Not since the IPCC was discredited last year for being a cabal of activists scientists, speaking through political appointees and relying on Green NGO press releases instead of peer reviewed science in up to 30% of references.


Good Summaries of Climate Change Issues:

1. American Thinker – Global Warming ‘Science’

2. Joanne Nova – The “ten second” guide to the world of skeptics.

3. David Evans, Carbon Accounting Modeler, Says It’s a Scam

4. Eight myths of a carbon tax, Tony Shepherd, The Australian, April 01, 2011


But then what should we do?

Firstly, I will let Bjorn Lomborg, an environmentalist and a ‘warmist’ believer in Climate Change, explain, as he did to  Tony Jones on Lateline, exactly why this Carbon [dioxide] Tax will do nothing for the climate and may make us too poor to respond to climate challenges in the future. Whether you are a believer or skeptic, he explains what we should do better than I ever could.

Full transcript of interview here.

Now some of my further thoughts,

Firstly, remember that we all want our children to inherit an unspoilt earth, prosperity and freedom, but that all three are equally important, so lets stop calling people who don’t rush to pay for everything labeled ‘climate action’,  by nasty names, blowing them up or jokingly strangling them (12).

Stop the hysteria, stop frightening our children in schools, stop politicking, socially engineering, legislating, carbon trading and profiteering from all things climate.

Polar bears are OK, Antarctic is growing (from bottom up) not shrinking, Himalayan glaciers won’t melt by 2035 and sea levels are not rising abnormally. In fact, global temperatures have been pretty static for 10-15 years. That does not disprove a longer term global warming, but it does prove there are natural climate forcings on at least a multidecadal time scale which are much stronger than CO2, that were not considered in the CO2 dominant climate models. We can have a breather.

Don’t impose carbon taxes and trading – it will cripple the very western rich economies from where innovation has traditionally come from (don’t worry,  Asia will not be silly enough to cripple itself – maybe just some cosmetic ‘climate action’).

Continue using fossil fuels, but encourage efficiency. Invest a fraction of the money being spent currently on hair brained schemes, on alternative energy research across a all fields (without trying to pick winners) and evaluate outcomes calmly and objectively.  (I borrow this unashamedly from Bjorn Lomborg, the sceptical scientist, who rightly reminds us that INNOVATION is the answer).

Simultaneously clean up and regulate climate science – it is too important to rely solely on ‘academic research’. Use academia for rapid research, but public policy should only be influenced by objectively and publicly audited and verified results (the IPCC should have been this, but turned out, as arguably all things UN, ineffective, political and biased).

As renewable or alternative energy becomes cheaper and fossil ones more scarce and expensive, the changeover away from fossil fuels will be truly market driven. This is not rocket science – we do do the same for medicine, where we publicly fund academic research and then regulate it before releasing it on the the public.

That’s my 2 cent’s worth, after spending 2 years of my life reading about  $^%$@  climate.

…work in progress, last update 1 April 2011
(Apologies for scarce referencing in this opinion piece due to time constraints – I give several links to better referenced sources ).

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