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Australia's Carbon Tax: A Sheep in Wolf's Clothing?

Author Info

  • Spash, Clive L.
  • Lo, Alex Y.

Abstract

The Australian Government has produced a CO2-equivalent tax proposal with a difference, it is a short prelude to an emission trading scheme that will allow the increasing rate of emissions to continue, while being a net cost to the Treasury. That cost extends to allowing major emitters to make guaranteed windfall profits from pollution permits. The emission trading scheme suffers numerous problems, but the issues raised show taxes can also be watered down and made ineffectual through concessions. Taxpayers will get no assets from the billions of dollars to be spent buying-off the coal generators or other polluters. The scheme hopes to stimulate private investors to create an additional 12 percent in renewable electricity generation by 2020. A serious emissions reducing alternative would be to create a nationalised electricity sector with 100 percent renewable energy within a decade. We explore the difficulties of implementing meaningful greenhouse gas taxes in Australia.

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File URL: https://mpra.ub.uni-muenchen.de/33997/1/MPRA_paper_33997.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 33997.

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Date of creation: 03 Oct 2011
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Handle: RePEc:pra:mprapa:33997
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Keywords: greenhouse gases; taxation; emission trading; climate change; regulation; renewable energy; Australia;

Find related papers by JEL classification:

  • D62 - Microeconomics - - Welfare Economics - - - Externalities
  • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
  • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
  • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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  1. Spash, Clive L., 2009. "The Brave New World of Carbon Trading," MPRA Paper 19114, University Library of Munich, Germany.
  2. Loschel, Andreas, 2002. "Technological change in economic models of environmental policy: a survey," Ecological Economics, Elsevier, vol. 43(2-3), pages 105-126, December.
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  9. Bovenberg, A.L. & Goulder, L.H., 1996. "Optimal environmental taxation in the presence of other taxes : General equilibrium analyses," Other publications TiSEM 5d4b7517-c5c8-4ef6-ab76-3, Tilburg University, School of Economics and Management.
  10. Mokyr, Joel, 1991. "Evolutionary Biology, Technological Change and Economic History," Bulletin of Economic Research, Wiley Blackwell, vol. 43(2), pages 127-49, April.
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  12. Robert W. Hahn, 2009. "Greenhouse Gas Auctions and Taxes: Some Political Economy Considerations," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 3(2), pages 167-188, Summer.
  13. David Popp, 2002. "Induced Innovation and Energy Prices," American Economic Review, American Economic Association, vol. 92(1), pages 160-180, March.
  14. Spash, Clive L., 2007. "The economics of climate change impacts a la Stern: Novel and nuanced or rhetorically restricted?," Ecological Economics, Elsevier, vol. 63(4), pages 706-713, September.
  15. Pearce, David W, 1991. "The Role of Carbon Taxes in Adjusting to Global Warming," Economic Journal, Royal Economic Society, vol. 101(407), pages 938-48, July.
  16. Richard G. Newell, 2010. "The role of markets and policies in delivering innovation for climate change mitigation," Oxford Review of Economic Policy, Oxford University Press, vol. 26(2), pages 253-269, Summer.
  17. Baranzini, Andrea & Goldemberg, Jose & Speck, Stefan, 2000. "A future for carbon taxes," Ecological Economics, Elsevier, vol. 32(3), pages 395-412, March.
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