Australia needs a sensible carbon debate
Tuesday, December 22nd, 2009What Australia needs now is a sensible debate on what is the best way to actually reduce emissions with least damage to the economy
Australia urged to drop ETS and adopt a carbon tax
I simply copied this because it makes sense.
In the wake of Copenhagen, one of Australia’s foremost energy academics has called on the Federal Government to introduce a carbon tax immediately and drop plans for an emissions trading scheme.
Professor Tony Owen, the Santos Chair of Energy Resources and Director of the University College London’s School of Energy and Resources in Australia, says the general failure of the Copenhagen climate change talks has left the Australian public “hopelessly confused by the plethora of countervailing political claims regarding the optimal policy for Australia to reduce its carbon footprint”.
“That lack of decision from Copenhagen gives Australia the opportunity to now stand back and reassess our carbon pollution reduction scheme and replace it with a more efficient and flexible mechanism – a carbon tax,” says Prof Owen.
He says the simple conceptual appeal of an ETS, that of sharemarket-like trading paired with emissions target compliance, hides wasteful complexity and cost that will inevitably be passed on to consumers.
“The devil is in the detail and in its current form, the ETS requires a range of new mechanisms including auctioning and administrative allocation, a registry and audit body, an enforcement body, a monitoring body and a trading institution,” Prof Owen says.
“A profitable industry will inevitably develop around the acquisition and sale of the permits with the profits from such activity going to traders and entrepreneurs who use the system to make money while having no commitment to greenhouse gas reductions.
“This will achieve nothing other than drain resources from the intended greenhouse gas abatement objectives.
“The better way of imposing a cost of carbon on the Australian community that avoids many of the practical inefficiencies of an ETS, is a carbon tax.”
Prof Owen argues carbon taxes – fixing the price of GHG emissions in dollars per tonne of CO2 – were transparent and simple to apply. Often, the existing tax structure could be used, minimising operating costs.
“Carbon tax revenue can be used to offset existing, inefficient taxes – such as employment taxes or stamp duties – or to compensate poorer sections of the community or to support research into low carbon prospective technologies,” Prof Owen says.
“In common with an ETS, a carbon tax will also encourage adoption of low-carbon technologies through price signals.
“Carbon taxes give a known cost of reduction of emissions, removing a major risk for investors in the energy sector – a benefit the ETS does not have.
“While it is true compensation is also an issue with a carbon tax, exemption for energy intensive export industries can be handled in a similar manner to rebates under the GST.
“This also supports the polluter-pays-concept for exported Australian energy products and removes the potential adverse competitive impact of a carbon price on exports as the ultimate polluter is the final overseas customer.”
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