Socialist Pigs - Carbon Tax Compensation

[tom32]

There are a lot of things to say about a proposed carbon tax, but i'll stick with the two most obvious:
1. Show me proof that the amount of Carbon humans produce affect global warming.
2. Prove that there is such a thing as global warming. A few record temp days here and there proves nothing!

1. Carbon dioxide is a heavier gas than our atmosphere on average so with a higher mass will retain more heat than a lighter gas. When coal is burnt it releases carbon dioxide as a by product. Before it is burnt said carbon is not in the atmosphere. In absolute terms we are having an impact on the climate. I don't think that can be questioned.

2. Global temperatures change over time There is lots of evidence of this in geology (Glaciers leave there marks in places a glacier would be out of place today). Then when the dinosaurs were cruising around it is understood that it was much warmer than today. The extent of many animals considered unsuited to living at sub polar latitude have left fossilised evidence that they were living there along with forests. Much of the carbon during this period of warmth was contained in the atmosphere at this time trapping more of the suns heat. This carbon gradually got bedded down at the bottom of the oceans and in swamps etc.

Apart from carbon though it is also understood the globe goes through a cycle of warmth / cold of which we are coming out of the end of an ice age. Indeed the current time in the schemes of things is still the tail end of an ice age.

Now all of that aside I am not convinced that global warming caused by humans is having an impact greater than what it would cost humanity to fix the problems as they arise from global warming. It has an impact but this impact is less costly than the action we are embarking on for Australoia at any rate. Not for France or other non fossil reliant economies but for Australia it is.

I think the question that has to be asked is; what is the cost of allowing carbon dioxide and other greenhouse gasses to be dissolved in the atmosphere?

Knowing the costings they do on smoking related illness 32bn per annum apparently, us smokiers if we all quit would fix the budget deficit, lol. Anyway I suspect the government is padding out a case to suit themselves in both of these cases. I am not sure that it really is a case for acting dramatically on carbon.

I watched a doco last night about pacific islands already being effected. 10,000 people to be displaced if the globe keeps warming. Tuvolu I think it was called?

IMO back of the envelope style it would be cheaper for Australia rather than to act on climate change to give all 10,000 of them $500,000 = 5billion and resettle them in Australia. This would be Australia doing its bit for humanity. The USA could take in a hundred thousand (should help to get rid of their housing glut too!) and all this would cost less than taxing our use of carbon.

I reckon Australia is better off doing nothing on two counts; 1. We have a competitive advantage in coal and gas power over most economies. 2. We have low rainfall on our continent and in theory at least higher temps should drive more precipitation. I think this is where the research has to be done. Modelling Australias future climate post carbon change.

It is being done but I fear after the earliest work done which showed Australia as a beneficiary of climate change in terms fo rainfall now it seems we will get less. It seems this has to be nutted out and agreement around Australias position.

 

[StefanA]

I appreciate the role of cost in the supply demand curve. However, I am inclined to believe whenever govts intervene excessively in free markets, there are unforeseen outcomes that offset or adversely effect their good intentions.

And the opportunity cost of govt intervention is usually unaffordable.

For instance, the populist debate in Australia is dominated by issues of equal opportunity, wealth redistribution, global warming, gay rights, etc. While all this goes on, wealth and job creation issues are ignored or treated as evil capitalism.... We thereby lose the opportunity to become globally competitive and innovative in pharmaceuticals, telecommunications and IT technology. We also spend comparatively less on defence, leaving ourselves a less potent voice in the world.

Over time, people lose the opportunity to be employed in the private sector, and become more dependent on the public service for work.....and thus do gooder socialists create a nasty positive feedback loop, and lull the goose that lays golden eggs into an infertile fugue.

 

[tom32]

I appreciate the role of cost in the supply demand curve. However, I am inclined to believe whenever govts intervene excessively in free markets, there are unforeseen outcomes that offset or adversely effect their good intentions.

I agree with much of your post Stefan the only thing is;

The free market is incapable of internalising a negative externality.

i.e. lets say I cruise around every day with a dump truck picking up contaminated fill. If there was no levy on disposing of this waste in the ocean I would be on a winner. This external cost is not mine to bear so I just merrily cast it out to sea.

This was how things rolled in centuries past.

By either banning disposal of it in the ocean or placing a cost on it which reflects the damage it does to the environment I then consider my actions in a new light. The external cost is now mine to bear.

By the way I am explainign the theory here not saying I am endorsing the tax!

 

[Aaron Sice]

here's a scenario.

Sweden couldn't impose a further tax on polluters in the energy industry after their first run of their version of a "carbon tax" (at least i think it was Sweden? Norway? can't remember now...).

so to clean up the waterways that larger-but-local industry were using like abbatoirs, power stations etc they made a simple rule.

make the outlet of your water return system UPSTREAM of your water inlet system.

it was simple. it was effective. it worked.

abbatoirs needed clean water, power stations needed clean water, but thewir waste was entering the system upstream from where they were pulling it from.

reed beds, bio filters etc were all employed to filter the waste water before it hit the actual waterway at a reasonably low cost with pretty much nil on-going maintenance.

there's a solution without a tax for disincentive. that's a solution by mandate and allowing the private companies to operate as they do; being the most efficient means possible for their own solution.

 

[StefanA]

The free market is incapable of internalising a negative externality.

I don't agree. How well a free market works is dependent on how well informed the market is.

A poorly informed market is open to manipulation as much by politicians as by multinationals.

Take junky fast food for instance. Is it the market's fault people eat fast food, or the individual?

According to price in the supply demand curve, there should be a humungous junk food tax. But no prize for why there isn't.

Govt intervention is responsible for compulsory super. How efficient is compulsory super?

 

[tom32]

I don't agree. How well a free market works is dependent on how well informed the market is.

A poorly informed market is open to manipulation as much by politicians as by multinationals.

Take junky fast food for instance. Is it the market's fault people eat fast food, or the individual?

According to price in the supply demand curve, there should be a humungous junk food tax. But no prize for why there isn't.

Govt intervention is responsible for compulsory super. How efficient is compulsory super?

An individual has a choice about eating junk food. Eat it you get sick over time. The food chain making it is giving people a choice not forcing it onto anyone. This is not somethign that requires regulation but as you say education.

The ocean extending my example above does not have a choice as to what gets dumped in it.

I understand the risks to marine life if oil is dumped into the ocean for example. If there was no regulation around it and I was asked to dump a 205L drum of oil in the ocean for the payment of 1million dollars of course I would dump it in a heartbeat and I am afraid I am not alone. Indeed anyone who says they wouldn't is either lying or a saint.

Being educated is not enough. People do things based on the cost to them of doing it. Negative costs to society at large are often not considered by individuals in their actions where there is a large benifit to that individual of continuing the negative action. It is a well documented phenomenon; tragedy of the commons.

 

[tom32]

here's a scenario.

Sweden couldn't impose a further tax on polluters in the energy industry after their first run of their version of a "carbon tax" (at least i think it was Sweden? Norway? can't remember now...).

so to clean up the waterways that larger-but-local industry were using like abbatoirs, power stations etc they made a simple rule.

make the outlet of your water return system UPSTREAM of your water inlet system.

it was simple. it was effective. it worked.

abbatoirs needed clean water, power stations needed clean water, but thewir waste was entering the system upstream from where they were pulling it from.

reed beds, bio filters etc were all employed to filter the waste water before it hit the actual waterway at a reasonably low cost with pretty much nil on-going maintenance.

there's a solution without a tax for disincentive. that's a solution by mandate and allowing the private companies to operate as they do; being the most efficient means possible for their own solution.

That is a very neat solution indeed.

By making the outlet above the inlet it made the opollution that factories problem thus internalising the cost of the pollution.

Nice. How do we do that for carbon pollution when it has no direct cost to a company but apparently a global one?

 

[StefanA]

An individual has a choice about eating junk food. Eat it you get sick over time. The food chain making it is giving people a choice not forcing it onto anyone. This is not somethign that requires regulation but as you say education.

The ocean extending my example above does not have a choice as to what gets dumped in it.

I understand the risks to marine life if oil is dumped into the ocean for example. If there was no regulation around it and I was asked to dump a 205L drum of oil in the ocean for the payment of 1million dollars of course I would dump it in a heartbeat and I am afraid I am not alone. Indeed anyone who says they wouldn't is either lying or a saint.

Being educated is not enough. People do things based on the cost to them of doing it. Negative costs to society at large are often not considered by individuals in their actions where there is a large benifit to that individual of continuing the negative action. It is a well documented phenomenon; tragedy of the commons.

What's the point of regulating bad corporate behavior, if the regulators consistently fail? i.e. The market was lulled into a false sense of security regarding the behavior of Bernard Madoff by incompetent regulators. The same is invariably true of ASIC's regulation of corporate behaviour. The market is not protected until after the damage is done, which is no protection at all. Tell Storm Financial victims corporate governance works.
Laws established by governments continue to fail to protect the market in dramatic fashion.....

This is the issue imo. Govt lulls people into a false sense of security, expecting the market/consumers to believe our minders are looking after us. Did the govt tell me food security was threatened during Brisbane's January 2011 floods? No.

I will continue to err towards outsourcing less to govt.
As for global warming and a carbon tax, when proponents can instead stand up and say they want negative population growth, and to ration electricity and motor vehicle use, and reduce farming of animals for human consumption, then I will have some respect for them. Basically, if they had any guts, they'd skip the tax and regulate the aforementioned.

 

[tom32]

What's the point of regulating bad corporate behavior, if the regulators consistently fail? i.e. The market was lulled into a false sense of security regarding the behavior of Bernard Madoff by incompetent regulators. The same is invariably true of ASIC's regulation of corporate behaviour. The market is not protected until after the damage is done, which is no protection at all. Tell Storm Financial victims corporate governance works.
Laws established by governments continue to fail to protect the market in dramatic fashion.....

This is the issue imo. Govt lulls people into a false sense of security, expecting the market/consumers to believe our minders are looking after us. Did the govt tell me food security was threatened during Brisbane's January 2011 floods? No.

I will continue to err towards outsourcing less to govt.
As for global warming and a carbon tax, when proponents can instead stand up and say they want negative population growth, and to ration electricity and motor vehicle use, and reduce farming of animals for human consumption, then I will have some respect for them. Basically, if they had any guts, they'd skip the tax and regulate the aforementioned.

Financial regulation is one thing but the specifics of guaranteeing deposits or bailing out banks is actually the opposite of what is ideal. I am with you around this it is stupid for government to get involved with private sector failure! In that case we are not talking about internalising external costs here our government and that in the USA; they allow companies to shirk out of their costs they should bear!

We had a situation where banks collected deposits and in this country they were never guaranteed. Costello was lobbied to guarantee banks during the Asian economic crisis but said to do so would be to introduce a moral hazard. The government wears the cost of individuals behaviour, which sets a market up to fail. You want the cost burden to fall on those who take the risk / make the profit. Not the taxpayer and not the government. If this is not how it is set up people take advantage of the explicit guarantee and lose the governments money after milking what they can.

Anyway I would agree with your central theme that our government is too inept to be effective at all in regulating to create efficient and transparent markets. Through stupid regulation and these days even getting involved directly they have created a rod for the taxpayers back in years to come.

I guess who am I kidding, it is highly unlikely that they will get the carbon tax right either so theorising on the merits is probably a pointless pursuit on my part. They are likely to first tax businesss and then go aroudn under pressure giving out carbon credits to the party faithfull whenever it appears that the tax is doing what it is meant to. Close inneficient business to allow capacity to be utilised in the new green economy. This is the taxes very design, yet the bag of **** we are likely to end up with probbly will be a simple money go round because our government is weak as ****.