Will the Carbon tax work?

Another day has passed, and once again the quality journalists in the Canberra press gallery spend their time trying to figure out how to make the opposition leader the focus of their venom. They have forgiven the Prime Minister for deliberately misleading the electorate just prior to the election, some are even portraying her malfeasance as "strength" and "standing up for something".

There was a time (perhaps long since gone) where standing up for something meant that you were willing to stick to your principles, regardless of the personal cost. The time for the PM to "stand for something" was prior to the election, where she could have made it clear that she believes in catastrophic AGW, and is willing to impose a living standard changing tax to alter the behavior of the Australian people. She instead chose a path of expediency, as she does now with her negotiations with the Greens.

So why do the Canberra press gallery acquiesce? Apart from their entrenched bias, they actually believe a Carbon Tax is necessary to avoid catastrophic AGW. This of course shouldn't get in the way of them doing their jobs as journalists, but as we have observed from the PM, leftists seem to have a problem with principles.

Now the really sad part of this whole mess is that these same journalists haven't stopped to ask the most basic question - What effect is this tax going to have on CO2 production in Australia?
This should of course lead to the corollary - Is the cost worth the expected benefit?

These are basic questions that should be asked about any government policy - Will it meet the stated goals, and if so, is it the most effective way to achieve those goals?

As far as I can tell, no journalist has asked these questions and certainly no government spokesperson has answered them directly.

My suspicion is that the answers are embarrassing to both the Govt and the Greens, since the effects are likely to be negligible in terms of CO2 production (not counting any manufacturing that relocates to another country).

Assuming that a 5c a litre increase in petrol prices will have negligible change to our habits (since petrol use has increased despite doubling in price over the last 20 years), and that the state government based electricity generators are unlikely to be swayed by a $26/tonne coal tax (since the bulk of their consumers will be compensated for increases), how much effect on CO2 production will this tax have?

The next question is of course - If this tax is ineffective at this current rate, how high will it need to go to have an effect?

A sense of proportion

The government is imposing a "disaster levy" to help pay for the rebuilding of infrastructure that the QLD State Labor Government didn't insure. Their estimate is $5.6B, which should be put in proportion.

Rebuilding the flood affected parts of Australia's third largest city, and a number of major regional towns along the QLD coast is going to cost roughly a third of the price that this government paid for school halls and tuck shops.

Yup, the school halls policy has wasted the equivalent of 3 major natural disasters.

The Carbon tax you were promised ...

Gosh we are a lucky country, we are going to fix global warming, apparently through the imposition of a tax. It was such a good idea, the Labor party decided to keep it a secret in the lead-up to the last election. I guess they were afraid someone else might steal their policies.

So what do we know about the tax?
Not much, just like all other Labor policies, they are released without details. This allows them to do lots of hand-waving about the benefits, but not allow any scrutiny.
It is a great approach that works well with the super-intelligent left-leaning journos that prefer their investigations to be handed to them in a govt. press release.

Apparently it works by putting a price on carbon, which will necessarily increase all prices. But not to worry, because our wonderful government is going to give us all that tax back in compensation (well maybe not quite all of it).
Now this is supposed to add "certainty" and make all those power generators switch to renewables. And according to PM Gillard, it will stop us from "being left behind".

I don't quite understand how a new totally undefined tax is supposed to provide certainty. I don't understand how you are supposed to make any investment decisions when the new tax is already being mooted to increase. I don't understand why companies would want to switch to renewables when their consumers are going to be compensated for price rises.

The most bizarre thing is that most power generators in Australia are state government owned. They are run by Labor governments and presumably they all believe in AGW, and yet they haven't bitten the bullet on renewables. Could it be that renewables are expensive and unreliable?

And to complete the trifecta of lies from Labor, why is not choosing a high cost energy path "being left behind"? Our major trading partners are not bringing in these types of taxes, and they will continue to burn the coal and gas that we sell them, but which we are choosing to deny or own industry.

If anyone can explain this madness, I'm listening.