Short Term it is not such a big deal, is it?
I think people have to look at the long term around this tax and the purpose of our local ETS.
Short term as others have said, the income produced from the tax is put right back into the economy minus the administration costs. Presumably this will have only a limited effect. We still get our comparitive advantage around cheap energy now we just share it around the economy rather than giving the edge to our businesses. I would not say I am happy with the idea, but it could be worse, and this comes later...
Exporters for the most part will recieve concessions initially also so should not be going out of business from this in isolation.
But what is on the agenda next?
What seems to have been forgotten however is that in the longer term we are doing this to drive change around the world. To go about bringing in a global ETS. I assume this is still on the agenda, if not Australia moving unilaterally is pointless? This is not mentioned much, I suspect because we are told we get it all back as tax cuts for now.
I don't see this working in a global ETS system, we will be paying tax here for other countries. Nothing wrong with that but it needs to be made clear in my opinion as when the world moves to this Australia will have no choice. It just seems strange we are at the cutting edge of pushing for it.
What happens with a global ETS is that we then have to pay to economies that are developing and have not had the advantage of 200 years of rapid economic growth using coal (only fair really) and to those countries who do not have coal anyway and rely on nuclear or other sources, we become less competitive against.
Australia of all countries gets a considerable economic kick out of using coal energy. The big question really is assuming the world does warm 2 degrees over the next 50 years is it actually better for Australia we allow this unfettered but continue to reap the rewards of our edge around coal? Or is it better to mitigate this by the world moving together by half a degree or whatever that might be.
Why be included in the countries pushing this (like European ones with little coal) when other coal rich countries are not?
In this we seem to tally up all the costs of sticking with our economy (bye bye reefs etc, bye bye some infrastructure) as is and then sell the costs of moving green as wins as well (creatinng green jobs). My trouble with this is even Keynesians will tell you creation of jobs for the sake of it is a "wastefull mitigation". their are costs on the other side of the ledger for Australia of all places.
I guess my question is around the long term? Perhaps Australia is better off with an internal ETS. Are we better off with a global one though, the thing we are trying to achieve? If we are not happy with the idea of a global ETS than why are we trying to drive the world in this direction? Surely we should be doing a USA and going in precisely the opposite direction?
It appears to me in all this some turkeys do vote for christmas...
Edit: Added headings, though a wall of text is still a wall of text.