Carbon Price Countdown: Moving an economy

This post was first published on my personal blog and is part of a series of posts about reasons for why I support the Clean Energy Future package negotiated by the Greens, independents and ALP; read the first post and second post in the series.

The price on pollution is an important step forward. One of the ways it is an important step forward is how it will help move our economy to a lower polluting economy. It’s already happening in other countries with economies that are far larger than ours, and ones that aren’t nearly as stable or ‘robust’ as ours.

Yet the howls of  how the economy will be ruined have recently become louder.

The screams of economic terror are getting more blood curdling as major polluters and their political lap-dogs, the Coalition, become more frantic about the price on pollution.The major polluters know that the government’s Clean Energy Future package will mean a change to our economy.

The major polluters also know that the price on pollution, moving to an emissions trading scheme, will force them to change their corporate behaviours and will have to cut their emissions. However what is quite telling is that Coalition Members of Parliament continue to buy and trade shares in mining and energy companies. Indeed, various modeling done by some of the major polluters show that they will have to reduce their emissions to ensure continued access to a growing number of markets that are penalising imports with high emissions attached to those imports.

There already exists billions of dollars of investments in infrastructure in the mining and energy sectors.

But this is not about the existing investment in the ‘pipeline’, this is about the future investment in cleaner energy options and measures to reduce our total emissions. It’s also about  developing more sustainable means of producing and distributing energy; the power our first world economies need to continue, and help the third world develop futures to support their countries’ endeavours and aspirations.

Much misinformation has been spread about how jobs will go. Yet if our state governments stopped retreating from renewable energy investment and development the growth in jobs in renewable energy can grow. Investing in renewable energy and transforming our economy will grow jobs. It needs people to transform an economy.

We’ll still need electricians, construction workers, engineers, boiler makers, technicians and raft of other existing jobs to make it all work. There is still going to be a need to service the renewable energy systems and for people to work on more efficient and effective means of producing and distributing renewable energy. It also means that we have opportunities to transform our economy in other ways.

Ultimately though you only need to look at the softening rhetoric from business about the impact of the carbon price. Take today’s article “Carbon pricing spurs business on” in The Age; while it’s clear there are still some underlying concerns business is getting on with preparations for the carbon price and the eventual transition to an emissions trading scheme.

I support the carbon price to help shift from a high polluting economy to a low polluting economy.

I look forward to hearing your reasons for supporting the Clean Energy Future package. Leave your comments below.

73 comments on “Carbon Price Countdown: Moving an economy

  1. Alex.
    Before anyone can take your comments seriously I think you should address the coal that Australia exports to the world. This coal is presumably burnt in other countries to make electricity to support the steel, manufacturing, aluminium smelting industries in the destination countries (which are competitors of Australia)
    Can you reconcile our coal exports of 231,311,000 Tonnes which is exempt from Gillard’s Carbon Tax.
    http://www.nationmaster.com/graph/ene_coa_exp-energy-coal-exports
    and our domestic coal usage of 144,170,000 which pays a Gillard Carbon Tax
    http://www.nationmaster.com/graph/ene_coa_con-energy-coal-consumption
    Quite apart from Gillard promising “…there will be no Carbon Tax etc etc etc”
    do you see the warm inner glow hypocrisy of this issue?
    You do see the lunacy of Gillard bending over for the Greens on this issue.

  2. Today I received notice of change from ACTEWAGL re energy increased pricing tabled as follows
    Generation = 0.6%, Carbon price =14.2%, Green schemes = 0.5%,Network = 1.4%, Retail = 0.2% total = 17.7%.
    I was under the impression the CP would not be that high. I know our infrastructure is newer than most but its qouta of the whole is very very small. Comments welcome

  3. Green schemes of 0.5% seems a little miserly. You’d think they’d be encouraged to spend more money of green technology.

  4. Cu, many companies are pleased that the carbon price was introduced. It gives them something to hide their price rises behind.

  5. The “Liberals” are apparently having some sort of “conference” at the moment. A room full of “Liberals” – just imagine how much BS is flowing!

  6. An inconceivable amount, might I suggest, Cuppa. Some dramatics probably being played out too.

    What’s the bet they’re hatching their next “we demand an election now” plan.

  7. Clive in one corner, Tony in the other. Bough outside the ring. They had a preliminary, earlier this week,

  8. Here it is Cuppa.

    Palmer lashes ‘Stalinist’ Libs after losing lobby bid

    by: John Ferguson and Christian Kerr
    From: The Australian
    June 30, 2012 12:00AM

    As Mr Abbott left from a side exit after the vote, Mr Palmer unleashed an extraordinary attack in which he directly opposed Mr Abbott’s asylum-seeker policy and accused the party of acting like a dictatorship.

    “Mr Abbott put the fix to that,” the mining magnate said of the vote on party rules.

    “You can’t compromise honesty and integrity for anything.”

  9. Btw, Tony Abbott doesn’t seem to understand ‘caretaker’ rules during an election campaign, as he claims to be planning to write to the Dept., of PMC on the first day of the election campaign to plan the dismantiling of the Carbon “tax”…
    as he announced on ABC24.

  10. Does one get the feeling that Abbott is going over the top.

    Hockey was hysterical this morning on TV.

  11. Alex, a very timely article, as we find in this morning’s SMH as per below:

    THE Coalition’s climate change policy could end up costing an extra $24 billion if ”Direct Action” fails to achieve its assumed ambitious greenhouse emissions reductions from soil carbon and tree planting, an analysis provided to the government says.

    And..

    The original Direct Action policy states that, like the government, the Coalition would seek to pay for the early closure of a brown-coal-fired power station, but this part of the policy was abandoned last year when Mr Abbott visited the Latrobe Valley and said there was no reason for Australia to stop generating electricity using brown coal.

    http://www.smh.com.au/national/opposition-climate-plan-could-cost-extra-24b–study-20120629-217zm.html#ixzz1zDtqg98a

  12. IMO an extremely poor analysis by George Megathingy in the oo.. Whoa there George, but aren’t electricity prices the realm of State governments and privatised utilities companies.

    It is, in effect, a stab in the dark with one very surprising twist: the reform side of the equation — the carbon tax’s promise to change behaviour by moving the economy from dirty to cleaner energy sources — can already be measured ahead of its official start on Sunday July 1 because we have been living with elevated energy prices for the life of this Labor government.

  13. Oh so I get it. When Howard was in power rises in energy costs were the fault of the Labor State governments, even though Howard’s diesel subsidy had the direct result of significantly increasing the cost of energy and many other things.

    Now Labor is in government and there are raft of Liberal State governments whose energy costs are going up in huge chunks, more so than they did under the previous Labor governments, it’s the Federal Labor government’s fault.

    I see how this works.

  14. Migs
    I am forwarding my notice of energy increases on to the ACCC and I mentioned it to my lad this morning he was surprised it was so high and indicated it should also go to Greg Combet’s office. You must have or soon will receive the same notification. May the force be with us all as Armageddon starts tomorrow, what with it being my 51st wedding anniversary as well, so no 52nd to worry about thanks to Abbort. When Greg gets it he and Penny will have advance warning of a Humphreys anticipated Senate Question if they were still sitting.
    PS our ferret passed away last night in pain only 30hrs after being doctored, a simple operation, he never really recovered.

  15. As Emerson twitted, Bunnings is out of sky catching nets and I replied also out of wrecking balls and pythons.

    Tomorrow is going to be an Armageddon like no other and hope the media pull up Abbott if Australia isn’t destroyed on Sunday July 1 2012.

  16. Bilko, that’s terrible news about the ferret and I know you were quite attached to the little fellow.

    I would have preferred it if Humphreys had have passed away. He is a prize hypocrite. At a community meeting in Gungahlin he told the residents how great the NBN would be for the area. A week later he publicly cans it as a complete waste.

    I’d say he himself is a complete waste.

  17. Re the possible cost blowouts of Abbott’s tree plantings. This goes to a bigger, perhaps THE issue, of an Abbott government. Which is that it’s simply not possible to predict. The liberal’s carbon pricing policy was junked the instant it was no use, there’s no reason to suppose this one will fare differently. This applies across the board. A current or recent TPS topic is “…the man who walks away”. As I see it, the only certainty of an Abbott prime ministership is that he’ll need money & lots of it. Perhaps the only promise he’ll be held to is his promise to keep YOU (ME) in clover.

  18. Bob, since Abbott first put forward his plan..zilch by way of specifics. Although a prime export of Australia is coal, it’s the brown coal and about 1/3 dirtier than black coal. The town of Yallourn was demolished in order to expand the open pit..it’s very much a dwindling resource.

  19. News.com are very busy echoing Abbott’s prediction that the sky will fall down tomorrow.

    Do they really believe it?

    We’ll wait and see. If they continue operating tomorrow then I’m guessing they never really believed it.

  20. To build a house will cost at least 7% more. To build a road will be around 17% more, a railroad will be around 10% which is the average of all other infrastructure then add the GST on top.

    Bricks will be about 38% more, concrete and quarry products about 2% but will rise over the next six months as the cost embeds in.

    The formula for input increase, price rise plus 25% margin, plus GST. All the way down the chain.

  21. Heard along the grapevine that superior leader CAN’T DO CAMPBELL will quit state politics early in the new year, and challenge NO NO ABBOTT for the Federal LNP leadership?????.

  22. And whilst the GST was never compensated for all the way down the chain, the carbon price will be.

    Most ordinary Australians will not notice much of a difference except that every price rise that would have happened anyway, every business that closes that would have happened anyway and every job loss that would have happened anyway will be blamed on the carbon price.

  23. Our wood-merchant has already raised his price per tonne and is blaming it on the carbon tax, *shonk*. The shonks will be coming out of the wood work now.

  24. What was the estimation the other day..it was Sue who pointed this one out..that it would add 1 cent to the price of a kg of mincemeat.

    Is it just me or have prices been going nowhere but up for the past decade or several, so how anyone is going to differentiate between a normal price rise eg. hailstorm in Victoria wiping out the cherry crop or a drought in NSW, and the impact of the price on carbon, is IMO going to be exceptionally difficult.

  25. LOVO, I hope that your wood merchant realizes that Swan has stated that anyone caught rorting the system would be investigated…however, I doubt if Swan would bother with the local wood man. 😉

    No point in saying, take your business elsewhere, because if it is anything like when I was at Billinudgel firewood is a scarce commodity. I used to be able to pick up bags at the local servo tho’.

  26. how anyone is going to differentiate between a normal price rise……… and the impact of the price on carbon

    Don’t worry Min, murdochs minions will be out and about spruiking every movement as an imminent collaps of Western Civilization for us 😉

  27. Tom, I honestly this that it will all be stale news come Monday… Plenty of chicken littles out in full force today, but today’s news is nothing more than tomorrow’s fish & chip wrapper.

  28. Migs and others , Thank you for your kind words re “Thane” the ferret who was my grandsons 18th birthday present, he is subdued at present and the vet is doing a great “Pontius Pilate” act so I will be having a f2f on Monday.
    From the reports I read the Lieberal Melb lovein has gone according to expectations. I suspect Abbort will have received a standing ovation similar to Ruddock after Tampa so many years ago. The lieberals are like a scorpion it is in their nature to strike even someone giving a helping hand.

  29. My son-in-law sought quotes for some timber and sand. It appears sand has gone up $15 per tonne. Timber has also risen.

    Now where does producing sand emits carbon dioxide. As fuel has no carbon cost, where us that $15 dollars coming from. The same for timber.

    (Narrellan)

  30. George Megalogenis ‏has calculated that Abbott removing the carbon price will make everyone worse off unless power prices drop by 10% when he does it.

    That won’t happen, so Abbott is proposing to take away everyone’s tax cuts, pension increases and additional payments along with being worse off.

    That doesn’t bring into play Abbott’s DAP, which is estimated to cost each household $790pa with no compensation.

    I know who the great big liar is, and it isn’t a red headed female PM.

  31. The only time Julia Gillard has used the term “Carbon Tax” was in a 7:30 Report interview with Heather Ewart. Heather had used the “T” word four times in fairly quick succession while the Prime Minister had used the term “Price Mechanism” or “Price on Carbon” eight times.
    The transcript then records this exchange;
    “HEATHER EWART: With this carbon tax – you do concede it’s a carbon tax, do you not?
    JULIA GILLARD: Oh, look, I’m happy to use the word tax, Heather. I understand some silly little collateral debate has broken out today. I mean, how ridiculous. This is a market-based mechanism to price carbon.“
    On that single statement, more ink has been wasted and trees killed than any other issue in Australia’s recent history.

    http://archiearchive.wordpress.com/2012/07/01/tony-tilting-at-windmills/#comments

  32. Tony Abbott has finally codified his first policy.
    “On the first sitting day of Parliament under a Coalition Government, I will introduce legislation to repeal the Carbon Tax. The first piece of legislation to be debated in the Parliament will be the repeal of the Carbon Tax.“
    This will be an earth-shattering debate.
    Especially as there will be no Carbon Tax in existence at the time of the next election.
    Come to think of it, there is no Carbon Tax now!

    http://archiearchive.wordpress.com/2012/07/01/tony-tilting-at-windmills/#comments

  33. I do not know why Labor does not used the second part of that video, that the Abbott likes showing, where she says there will be no carbon tax… I would like it shown after every-time, the first half is shown.

    Notice today, many are saying it is not a tax.

    Personally, I believe that Mr.Abbott’s effects are past there use by date.

    My daughter, who one is not allow to mention politics in front of and refuses to listen, amaze me, while I was flipping through the paper to see what they had to s

    There was a article along the lines of PM bothered or something. My daughter actually surprised me by saying why they say she is bothered. Why do they keep saying that.about her.

    Yes perceptions can change. New ones can emerged. I believe there are perceptions arising that do not see Abbott in a good light. Mr. Palmer is not far out in his descriptions of Abbott.

    It would not surprised me that many will now say, the taxes are in. We do not want to hear anymore about them.

  34. Cu, well done Archie..nothing like a bit of basic common sense..let’s cut the cr*p and realize that 99.9% of it is Liberal Party PR.

  35. We are living through a period of political fantasy that for some people, especially the hugely popular Coalition, is quite pleasant. But as any psychologist will tell you, returning to reality usually involves a good deal of pain.

    First the fantasy. It centres on the carbon tax and its components are these:

    – Labor’s carbon tax won’t reduce emissions, but will hurt everyone.

    – It’s a market based scheme (good) but goes too far ($23/tonne, bad).

    – There are cheaper ways to achieve carbon cuts than a market-based scheme, and the Coalition knows what they are (why won’t silly Labor listen!).

    – Carbon tax revenue isn’t needed to fund Labor’s program of tax cuts and pension increases, because there are massive savings lying around in the budget papers to be scooped up and redeployed.

    The first three are easily dealt with, so I’ll be as brief as possible.

    http://www.businessspectator.com.au/bs.nsf/Article/carbon-tax-Labor-carbon-price-tax-cuts-permits-ETS-pd20120703-VTTER?opendocument&src=idp&utm_source=exact&utm_medium=email&utm_content=65675&utm_campaign=kgb&modapt=commentary

  36. No gain, all pain

    The fixed price period of the carbon tax will substantially reduce emissions. The Coalition claims there will be an overall increase in emissions between the launch of the policy and 2020 of 8 per cent, but that figure ignores abatement purchased abroad – until 2020, companies liable for the tax can buy 50 per cent of permits abroad where, due to global economic contraction, they are currently dirt cheap.

    The EU carbon price currently hovers around €8.5 (approximately $A10.50/tonne) meaning the Australian companies liable for $23/tonne permits here would be buying them by the bucketload if they could.

    Treasury states that “the [50 per cent] cap may be important if world prices are much lower than expected”. It expects Aussie companies to source 28 per cent of permits abroad, but when the cap is lifted in 2015 it could end up being a lot more.

    As for the ‘pain’ bit, Sophie Mirabella summed up this common misconception on the ABC’s Q&A last night, arguing that the carbon tax is ‘designed to hurt your hip pocket’.

    That’s an attempt to elide two important, if tricksy, aspects of the government’s policy: firstly, that Australians earning less than $80,000 will be better off overall due to a massive restructuring of the tax/benefits system and, secondly, that the aim of the tax is to change ‘relative’ prices – that is, to make cleaner products and services cheaper

    http://www.businessspectator.com.au/bs.nsf/Article/carbon-tax-Labor-carbon-price-tax-cuts-permits-ETS-pd20120703-VTTER?opendocument&src=idp&utm_source=exact&utm_medium=email&utm_content=65675&utm_campaign=kgb&modapt=commentary

  37. ….that the aim of the tax is to change ‘relative’ prices – that is, to make cleaner products and services cheaper

    Thus every State Liberal government getting rid of clean and renewable schemes so as to force dirtier and more expensive products and services on their citizens, then blame that hurt on the hip pocket on the Federal government.

    Again the thing that business article does not look at is the much greater cost of Abbott’s proposal on the hip pockets of everyone except the wealthiest people and biggest polluters. Businesses will be hurt badly under Abbott but their cries at the time will be mostly buried or snowed over by the media.

  38. ME, they have no love for the Abbott deal.

    I do not believe anyone does.

    Come to think of it, most of Abbott’s policies are rejected by experts.

  39. Did you know electricity use is falling? Or that household solar is almost at cost parity? Carbon pricing is changing the economy for the better, even if we’d rather pretend otherwise, writes Ben Eltham

    Like an alternative universe in a science-fiction story, it’s the same familiar world we knew on Saturday, but with a few strange differences.

    For starters, Australia’s largest polluters now have to pay a small charge for the right to dump toxic gases into the atmosphere. For my mind, that’s a win for Australian society on a moral level, immediately and transparently. No-one has a natural right to despoil the environment, not even local councils with a particularly gassy rubbish dump, and least of all the large and profitable corporations that own aluminium smelters or coal-burning electricity generators.

    http://newmatilda.com/2012/07/03/good-news-carbon-tax

  40. Mr. Denmore has no doubt caused many to spray their coffee with this one…

    Mad Tax

    Then, a voice. A banshee howl, though somehow reassuring in its strangulated nasality ‘Axe the tax! Axe the tax!’ He turned to see a woman, a ruddy-faced large woman, yelling from the window of a semi-trailer – the lead vehicle in a dust-churning convoy clearly headed for Canberra. “Jump on board, handsome,” she called, swinging the door open. “We’ve got some work to do.”

    http://thefailedestate.blogspot.com.au/2012/07/mad-tax.html#comment-form

  41. Please keep to the truth. Carbon tax is not to blame. I know, I live up the road. My son works in the industry. These power houses were built when I went to school. They are reaching the end of the economical life.

    Please read the facts.

    Looks like there is some beautiful land that is being returned to the people.

    The carbon tax has been partially blamed for the closure of a coal-fired power station on the NSW Central Coast.

    Delta Electricity, a state-owned generator, on Tuesday announced the closure of Munmorah power station.

    While the station has not operated since August 2010, the utility company said the federal government’s $23-a-tonne carbon tax was a factor in its decision.

    “The imposition of the carbon tax, with no opportunity for compensation for NSW black coal power stations, made its closure inevitable,” the company said in a statement.

    But Delta chief executive Greg Everett said the plant had higher fuel and operating costs before the carbon tax was announced, making the carbon price a “second order” reason for the closure.

    Mr Everett said commonwealth government compensation packages for privately-owned generators in Victoria and South Australia discriminated against publicly owned generators in NSW, Queensland and Western Australia.

    Federal Energy Minister Martin Ferguson hit back at the NSW government for using the carbon tax as an excuse to close a power station, which opened in October 1969.

    “When are they going to stop blaming others,” Mr Ferguson told reporters in Sydney.

    “Munmorah has not operated for two years. It was never going to operate again.

    “It is surplus to NSW energy capacity.”

    Greens upper house MP John Kaye said the closure of Munmorah, the state’s dirtiest power station, was a positive development, provided the NSW government didn’t turn the site into another polluting coal or gas-fired power plant.

    “The carbon price, if it did contribute to the demise, has done a good thing,” Dr Kaye told AAP.

    http://bigpondnews.com/articles/TopStories/2012/07/03/Carbon_tax_blamed_in_power_plant_closure_767777.html

  42. Although Cory Bernardi isn’t so sure you should believe his party. Here he is in his laughably-named “weekly dose of common sense” email trying to convince his supporters to ignore the pro-carbon price businesses:

    A group of businesses have surprisingly come out in support of the carbon tax, but it appears that all is not as it seems. Apparently many of them have a vested interest in carbon pricing at the taxpayers’ expense and some might not even exist, while only one will actually pay the tax!

    Yes, only AGL “will actually pay the tax”. What a refreshing reversal of the Liberals’ usual scaremongering.

    (Amusingly, both of Cory’s links to claims about those companies are to, you’d never guess, Andrew Bo… nah. You don’t need me to name him.)

    http://anonymouslefty.wordpress.com/2012/07/04/cory-bernardi-suddenly-thinks-only-the-named-top-polluting-companies-will-be-paying-the-carbon-tax/

  43. Source: Worldwatch Institute (2011)
    In Europe, wind and solar PV are even starting to outpace gas installations and have completely taken out coal, nuclear and any other source of power other than gas.
    European Union annual installations of power generation capacity (megawatts

    and

    In the United States you have a similar story. Wind and solar PV sit only behind gas in terms of new capacity added to the grid. The chart below from the US Energy Information Administration illustrates that they expect renewables capacity to slightly outpace gas over 2011 to 2015. The vast majority of this renewable capacity will be wind power and solar PV.

    http://www.climatespectator.com.au/commentary/why-small-beating-big-clean-our-energy-supply?utm_source=Climate%2BSpectator%2Bdaily&utm_medium=email&utm_campaign=Climate%2BSpectator%2Bdaily

  44. Aside from the fact that these are pretty much all things the Greens are actively promoting and happy to shout from the rooftops the most remarkable thing in this is the implication that “greater freedom of expression and association, freedom from arbitrary detention, legal due process and privacy” is somehow a bad thing and evidence that the Greens are dangerous radicals who must be stopped by faithful conservative footsoldiers.
    What a bizarre place the modern “conservative” movement has come to!

    http://www.blogotariat.com/node/444796

    http://www.crikey.com.au/?p=301002#comments

  45. Is this the first head to roll. Noticed that the so called carbon tax has been deemed to fail after less than a week.

    The head of one of Australia’s largest bakery chains, Brumby’s, has quit after revelations he urged franchisees to increase prices and blame it on the carbon tax.

    In an internal memo sent last night, the company announced that Brumby’s managing director Deane Priest tendered his resignation yesterday afternoon

    http://www.abc.net.au/news/2012-07-06/brumbys-boss-quits-over-carbon-tax-letter/4115044

  46. Is this the first head to roll

    Well, tabot did say that jobs would be lost due the Carbon Price. Mind you, he didn’t mention it would be because of him 😉

    She has also asked franchisees to remove any Liberal Party placards that mention price impacts due to the carbon tax.

    “We have not had the opportunity to inspect these placards and therefore have not formed any opinion as to their legality,” Ms Catterall wrote to franchisees.

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