Who gains most from axing the carbon tax – and at what cost?

By Stephen King

Unfortunately, the Senate debacle of the last two weeks and the imminent scrapping of the carbon tax hasn’t helped Australia’s international reputation as a nation doing our fair share to tackle climate change.

With the removal of the carbon tax, Victoria’s brown coal generators and the Latrobe Valley in general face less immediate upheaval.

That leaves the developed world in the situation where it should be encouraging research into how to generate energy cleanly and how to mitigate the ongoing damage that global warming will create over the rest of this century. some key technologies that are critical for deep decarbonisation in all countries’ pathways are not yet technically mature or economically competitive.

In economic terms, the carbon tax aimed to create “substitution effects” away from carbon intensive industries while compensating people for the “income effects” of the tax.

We can do nothing – or limit our ambitions only to cutting emissions within our own borders – and watch as global emissions continue to soar from China and India.

Under an effective carbon tax, brown coal generators would be the first to close.

The Labor government limited the number of businesses that had to pay the tax, while it also gave carbon tax relief to large carbon emitters and large energy users.

But, other than making us feel morally superior, it would have little direct effect on global climate change.

Read more here: Business Spectator


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