The Carbon Tax

This blog entry is a bit 'off topic' to my other posts but I thought to include it as it's a pretty big issue right now and is something I feel strongly about. For those that don't know, I wrote my final year project at RMIT University back in '08 about the impact an Emissions Trading Scheme on the Aviation industry in Australia.

Here is a summary of the relevant conclusions that I made;

"There is enough scientific evidence to conclude that there is a steady increase in global temperatures as a result of global warming. This global warming has been linked with greenhouse gases, mainly man-made carbon emissions. Countries, mainly from Europe, have committed resources to reduce these man-made carbon emissions in order to stop the rise of global warming. This was the main purpose behind the Kyoto Protocol, to bring understanding and action towards climate change on an international scale."

• It is still being debated whether man-made carbon emissions have much impact on global warming at all. Either way, I would still prefer to live in a world with clean air, wouldn't you?

"One of the first items that the new Rudd Government addressed once taking office was to ratify the Kyoto Protocol. This is because Australia will be one of the most effected countries if average global temperatures were to rise. The IPCC estimated that by 2070 these temperatures could rise by 5 degrees but also estimated that a rise of 3 degrees would greatly damage Australia’s natural ecosystems and ultimately Australia’s industries. Australia is highly dependent on natural resources and any impact on them would greatly influence the industries, mostly the agricultural industry. This is because as temperatures rise there is less rainfall, meaning that farm land becomes drier and more difficult to cultivate crops and raise livestock. Australia is a large exporter and any dramatic decrease in the availability of these goods and services would deeply affect the nation's economic growth" 

• All the people complaining about the rise in prices of goods because of a carbon tax really need to take a step back and think about the bigger picture here. With or without a carbon tax, these prices are going to increase regardless, especially food, as supply decreases because of availability of these resources, demand increases and so does the price. It's basic economics.

"An Emissions Trading Scheme should be operating along side other similar systems worldwide. The criticism to this is that when other countries like the United States and Japan implement their own Emissions Trading Scheme that it will still come short of half of global emissions, while countries without such a system will continue to increase their emissions. This is why it is important that Australia adopt an Emissions Trading Scheme in order to help positively influence other countries in the Asian region such as China and India, some of the world’s largest polluters."

• There are a lot of people out there arguing that Australia cutting down its carbon emissions will not reduce the overall carbon emissions of the planet significantly enough to warrant a carbon tax. Yes, Australia only produces a small percentage of the world's carbon emissions but if we start thinking outside our borders and take take steps to 'positively influence' those big polluting countries. Just think of our international standing if we are at the forefront of green energy solutions, and selling these new technologies to these other countries.

There are too many people seeing this carbon tax as just another tax. I do believe that an Emissions Trading Scheme would be more beneficial economically (and I do believe the Government's plan is to eventually switch to an ETS in the future) and remove the word "tax" that so many people hate. It should be viewed more as a tool to change the population's mind set. Unlike most other taxes, it's not there to increase the Government's revenue but to help people save money and make them more aware of energy consumption. If the cost of your electricity bill goes up, find ways of using less power in your home.

There is a financial incentive for companies there too. If two companies have two identical products and use the same amount of carbon emissions to produce them, then the cost of both products will increase. This creates a sort of "game theory" situation. However, if one of those companies finds a 'greener' way of producing that product, their production costs will decrease, and decrease the cost of the product to the consumer. When the consumer walks into the store and sees two identical products but one is cheaper, which one do you think the consumer will buy? This will give the company an advantage over it's competitor in terms of a larger market share.

It has also been argued that taxing companies more as a result of their carbon emissions will force them to reduce their costs which will result in job losses. This might be true, but as long as the Government encourages the pursuit of green energy, this will actually create more jobs in an entirely new sector of the economy.

People are too quick to dismiss the carbon tax before it even begins. Let's try it out, see how it goes. From what I have been reading, those households that it will affect, can expect an increase of around $400 a year. Yes, that seems a lot, but that's just over only $1 a day. And if you find ways of decreasing your household energy consumption, the actual real effect it will have on you will be next to nothing. I, for one, am more than happy to pay this extra cost in living, as the consequences of ever increasing man-made carbon emissions and inevitable global warming is just unacceptable.