Monday, March 7, 2011

Carbon Tax and Emissions Trading Scheme

Someone asked me what the Carbon Tax is all about. Also, closely related to that is the ETS, or Emissions Trading Scheme. Here is a link which will give you a very clear idea of what these are about:

Briefly, Carbon Tax is just a tax on the amount of carbon dioxide that an industry produces, while ETS is like the COE (certificate of entitlement) practised in Singapore. Like the COE, the government issues permits for X amount of carbon dioxide that can be emitted. If the permit is used up, the company has to buy more permits, perhaps in the open market, where permits can be freely trade.

My say: the intent is good, which is to force industries to be more conscious of the amount of CO2 it produces, and to take steps to reduce it. That is where all the good stops: just good intent. The implementation of it is pure nonsense; it is just another tax revenue for a government that has lost its ability to manage the country within a given budget. Don't listen to all the spin Wayne Swan and Julia Gillard are busy churning out. When any country has to make a choice between polluting the air or keeping factories running, which country will sacrifice for the environment? Julia Gillard will tax Australian companies into oblivion while every other developing country will happily keep their factories running at lower operating costs (no carbon tax). No other country has agreed to do this in their own country, so why does Julia Gillard think she is so "clever"?

Before Labor Government implements this harebrained scheme, I would like to see what comprehensive plans it has for saving the environment. Is it going to build an efficient public transport system, so that people are less reliant on cars to go to work? Is it willing to penalize owners of gas guzzlers by increasing the road tax for big capacity engines while subsidizing "green" cars? Is it going to make all government vehicles small and "green", to show that it is serious? Will it build bicycle tracks and encourage the use of motorized bicycles to replace cars for commuting? Enough of carbon tax spin. This is worse than a direct form of tax because not only will the general public eventually have to pay its cost, but manufacturing industries themselves may perish in the process. In a twisted way, perhaps this is the fastest way to reduce emissions.

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