Letter From the UK (About Australia)

Australia Repeals its Hated Carbon Tax

James Delingpole

17 Jul 2014, 
Breitbart UK

Australia has become the first country in the world to abolish its hated carbon tax - in fulfillment of an electoral "pledge in blood" by Prime Minister Tony Abbott.

The tax was introduced by the Labor-Greens coalition in mid-2012, despite earlier promises to the contrary by then Prime Minister Julia Gillard.  Prime Minister Abbott described the tax - estimated to have cost every Australian household $550 per year - as "useless and destructive." It has now been repealed, after much wrangling - and only on the third attempt - by the Australian senate.

As Phillip Hutchings reports at Watts Up With That?, the tax was indeed a total waste of time and money.
Among the reasons it was so misbegotten are:

The sanctimoniousness of such a tax in Australia is breathtaking. We are an energy heavy-weight, the world’s largest exporter of coal. Soon we will also be the world’s largest exporter of liquefied natural gas. At the same time as our Labor prime ministers were being successively culled by infighting over the carbon tax, the world’s biggest oil & gas companies were directing more than two-thirds of global investment in LNG production into Australia, the biggest investment boom ever in this country.

We are an economy built on the world’s hunger for fossil fuels. Yet with our gas and coal sources being either offshore or in remote locations, these vital export industries are mostly hidden from Australian voters.

The carbon tax itself was a lightweight. The theory underlying a carbon tax is to provide a long term price signal to drive a change in the industrial and consumer behaviour. On this score, the Australian tax was doomed to failure. After all, politically it had to appeal to the latte-sipping lefties, but without affecting their wallets.

To minimise the economic fall-out, the Labor-Green Government limited the carbon tax to large industrial emitters (more than 25,000 CO₂e/yr). Road transport and agriculture was exempt. Put together, that meant only about 185 companies in Australia’s US$ 1.5 trillion economy had to comply. And even those few were only lightly touched.

Industries which are “trade exposed” such as cement or aluminium smelting were mostly excused. They got either 66% or 94.5% of their carbon cost covered by the award of free units.

Just over one-third of Australia’s carbon emissions come from coal-fired electricity generators. And the dirtiest electricity comes from the aging brown-coal plants in Victoria – with almost double the emissions of modern gas-fired plants. Yet being located in a Labor-voting union heartland, they too got off lightly with the first half of their emissions effectively carbon- tax free. Nice.

3. It did little, if anything, to reduce carbon dioxide emissions. The Guardian, of course, claims otherwise. But this is greenie wishful thinking. As Hutchings notes, though greenhouse emissions in Australia have been declining for almost eight years (long before the carbon tax was introduced) this has much more to do with the doubling of electricity prices, which caused consumers to cut back drastically on their consumption. This is exactly what the carbon tax was supposed to do (drive up prices; change consumer habits) but it had already happened naturally so the tax was pointless.

Other countries to have experimented with either a carbon tax or an emissions trading scheme (which instead of taxing carbon dioxide directly, imposes a ceiling on CO2 production through tradeable permits) include the European Union member states, Japan and Korea.