Wednesday, 27 April 2011

Flawed, but better than nothing

I must say from the outset that it's a while since I looked into the Carbon Tax, but here's my take (and I've read differing views on it recently).

There is no denying that despite the fact it's levied on businesses, the cost will be passed on to the consumer. But it's to a limited degree and in all the right ways. We have competition to thank for that. Here's a short simplified example of how it WILL benefit the environment.
Let's take Power Company A. Just imagine it's whoever you're with. At the moment, Power Company A has mostly coal electricity. Green Power options are more expensive to research and develop, than coal, so they mostly don't bother. In the long run, green power is cheap. It's just expensive to set up at the beginning. And since Power Company A doesn't want to spend yummy profit, they stick with coal.

At first, all the companies cost about the same price. The next day, the Carbon Tax kicks in. From then on, it's going to be getting more expensive to keep using coal. No problem - Power Company A can just jack up the price to the customer, and keep using delicious coal, right? And then... and then Electricity Provider B see what Power Company A just did and think... hmmm, we think we'd like to steal their customers. We think it's worth spending some yummy profit this year, to make things cheaper next year, so that we can lower our prices and steal customers.

So they spend some delicious profit to invest in green, and they pass that investment cost onto the customers. At first, nothing much changes, both companies cost about the same. But in a little while, Electricity Provider B's investment is paid off, and they can lower their prices to the customers. WOOHOO says Mr Customer. I'm switching to the company that costs less.
Simple, right? Although you might have thought companies don't care, because they can just pass the increase onto the customers anyway, there is competition and that makes companies grow a conscience. Even if the conscience is a fake one and is all about greedy profits, they'll still do it.

Secondly - a direct result if the power goes up in price - consumers cry at their bills, and then they install solar panels and turn off lights and yell at their kids for staying in the shower for half an hour. These are all wins for the environment.

And then we have things like electronics providers. As the cost of power goes up with Power Company A, customers will be desperately searching for ways to reduce consumption. They'll be buying energy-efficient light globes, and so on. And if Television Company C starts advertising a TV that uses 10% less power, customers will bloody well go and buy it. So it's in Random TV Company D's selfish interests to spend yummy profit on researching ways to make their tellies that use less power - if they don't, they'll just go out of business because nobody will buy their TVs!

I don't think the Carbon Tax was the most efficient way to reduce greenhouse emissions. But we have to remember, it had to be put together in a way that could get past the voters. Let's be honest, the more efficient ways would have made everyone scream and run around like chooks with their heads cut off, and vote for Fred Nile or something stupid like that. Carbon Tax is a disguised, convoluted, magical mystery option, but at least it's something. And it's working - the number of solar panels on roofs is skyrocketing.

Now if only they'd grow a pair, and make those panels compulsory on all new buildings...

1 comment:

  1. I have my serious doubts the effect of me and my kids will have on the overall impact to the environment and sure multiply that and it may have an effect, but australia has such a small population on the world stage, it seems like a costly exercise to achieve a neglible result.
    Better than nothing - not so sure basing it on Australia's economy could mean econimic ruin for the country forget about affording green energy if they screw the country economically it means loss of jobs, recession and the worse the economy is the less we spend and what we do spend it on if more than likely the cheap and nasty options. which means product and produce from nations like china who are massive outputters of carbon. It's like weight loss, to eat healthy I need to buy good lean cuts of meat, fresh vegetables and high quality produce. it's more expensive than eating, cheap nasty fast and convenient foods, high processed foods, fast foods, frozen foods.
    A nation that is economically strong and full of nice fat pay cheques means we are more likely to spend the extra dollars on the energy efficient TV, more likely to look at getting in teh green energy people and assessing our options, buying higher grade petrol.
    Bottom line is there's a lot of theory on the effect of a carbon tax, the practicalities of the exercise is yet to be measured and I for one is not willing to put my economic future at risk to find out when the actual effect one small nation may have is virtually neglible.
    Instead of hitting the joe public and spending ridiculously unnecessary peices of infrustructure the government could be building wind power stations, lets face it Australia is a large baron country that is soaked in sun so why aren't our deserts and plains covered in solar panels and soaking up that precious juice.. becasue spending money on this kind of infrastructure isn't popular with getting votes and staying in governemnt and the state has sold off their assets on power etc... innefficient running of the government shouldn't be th eprice of the people... there's other options and if something is better than nothing then lets look at the options rather than simply focus on one idea that makes a section of our society feel warm and fuzzy whilst making F'all difference in a overall sense. Ie: the effect we count possible have is 0.02% or close to something like that. yeah lets do something but not that