Last night, I spent an hour driving back from a clients house, listening to the radio. There was a talk back show, and the discussion was about the Carbon Tax. At, least, it was in a roundabout sort of way.
The question posed was, because Prime Minister Gillard lied before the election about the introduction of a carbon tax, can we trust her now. The response, was, in my humble opinion, astonishing.
What became clear to me was that everyone ringing had little or no idea about the concept of a carbon tax. Whether you agree with a carbon tax as a solution to climate change, or in fact, whether you even believe in human induced climate change, it would be nice if people had an understanding of the issue. I am not so concerned with the 'lying' of our PM (not the first political porkie, and not likely to be the last), but that:
1). Our politicians do not go to sufficient lengths to properly explain the issues in front of the, and conversely, us, and
2). Voters, in general, seem to make very little effort to understand what is happening.
I don't know whether this is because most people are so tied to voting along party lines that they are prepared to accept what is said by their 'leader' or not, but, again, I would love to see people care enough to find out what is happening.
So, I am no economist (phew), but here goes. A Carbon Tax (in brief).
The theory is, that pollution is an economic 'external cost'. That is, a product which causes pollution produces a cost to society that is not factored into the price. As a result, it is overproduced, because the producer of the product does not have to take into consideration this cost when producing the good.
A carbon tax, then, allows a regulator to impose this cost on the producer who causes the pollution, increasing their costs, and also increasing or improving the competitiveness of non carbon technologies.
When people say that is will increase the cost of electricity, the answer is, Yes, it is designed to, providing of course that the electricity is produced through the burning of coal. A caller on the radio last night complained that the Alumina smelter at Gladstone would be negatively affected by the Carbon Tax, because they are powered by a coal burning generator, whereas the Tasmanian smelters are powered by hydro-electricity. Rather than being a negative, this is specifically what it is supposed to do.
More to the point, in my mind, this is simple supply and demand economics. A market based solution to a problem within a competitive market. Ironic then that it is being pushed by the so called 'socialists' on the left, and shouted down by the supposed free market supporters on the right.
The question posed was, because Prime Minister Gillard lied before the election about the introduction of a carbon tax, can we trust her now. The response, was, in my humble opinion, astonishing.
What became clear to me was that everyone ringing had little or no idea about the concept of a carbon tax. Whether you agree with a carbon tax as a solution to climate change, or in fact, whether you even believe in human induced climate change, it would be nice if people had an understanding of the issue. I am not so concerned with the 'lying' of our PM (not the first political porkie, and not likely to be the last), but that:
1). Our politicians do not go to sufficient lengths to properly explain the issues in front of the, and conversely, us, and
2). Voters, in general, seem to make very little effort to understand what is happening.
I don't know whether this is because most people are so tied to voting along party lines that they are prepared to accept what is said by their 'leader' or not, but, again, I would love to see people care enough to find out what is happening.
So, I am no economist (phew), but here goes. A Carbon Tax (in brief).
The theory is, that pollution is an economic 'external cost'. That is, a product which causes pollution produces a cost to society that is not factored into the price. As a result, it is overproduced, because the producer of the product does not have to take into consideration this cost when producing the good.
A carbon tax, then, allows a regulator to impose this cost on the producer who causes the pollution, increasing their costs, and also increasing or improving the competitiveness of non carbon technologies.
When people say that is will increase the cost of electricity, the answer is, Yes, it is designed to, providing of course that the electricity is produced through the burning of coal. A caller on the radio last night complained that the Alumina smelter at Gladstone would be negatively affected by the Carbon Tax, because they are powered by a coal burning generator, whereas the Tasmanian smelters are powered by hydro-electricity. Rather than being a negative, this is specifically what it is supposed to do.
More to the point, in my mind, this is simple supply and demand economics. A market based solution to a problem within a competitive market. Ironic then that it is being pushed by the so called 'socialists' on the left, and shouted down by the supposed free market supporters on the right.
