Consumer Carbon Cap
If every country in the world all implemented a consistent carbon capping scheme at the same time, there would no distinction between taxing the production of greenhouse gasses and taxing the consumption of products that generate greenhouse gasses. However, we all know that this is not going to happen – developing nations cannot justify the expense. Pointing fingers at non-participatory countries is unproductive so another solution is necessary.
The proposed framework for Australia’s solution to carbon emissions penalises the production of carbon emissions. Since most other countries are not implementing such schemes, this makes locally produced products more expensive. In reaction to higher domestic products, consumors will buy more imported products. Not only does this result in the collapse of Australian industries but also will not decrease carbon emissions – only shift them overseas where carbon emissions are not capped.
Internally carbon pricing consumed goods and services is a possible solution to this problem with many advantages. Charging the Australian consumer for the carbon emissions of the things they use can curb global carbon emissions while keeping economically competitive globaly. Carbon emissions are curbed because whether a product generating carbon emissions came from China, Fiji or Australia, more tax is charged for more carbon emissions – slowing demand and also funding environmental rehabilitation. On the other hand, Australia remains competitive because export prices remain on a level playing field, untaxed when sold offshore.
Keep in mind that the production model would allow Australia to import aluminium, steel and other energy-intense products from carbon-inefficient sources like China, no carbon prices would be passed onto the consumer. Although these producing countries are releasing the emissions, they are certainly not the only consumers. Wealthy western countries account for major exports from the highest emitting countries so shouldn’t they be penalised for the emissions their demand has produced?
This approach to solving global warming though carbon capping shares common disadvantages with the currently-accepted carbon production tax approach: A hit to Australians’ lifestyles. We might have to use more public transport or cycle more while being more conscious of lights and electrical appliances we’ve left on. Even if global warming isn’t real, sustainability is a great thing.
… from a radio interview with:
Geoff Carmody
Principal Geoff Carmody Associates Co-Founder Access Economics
Martijn Wilder
Baker & McKenzie
Entire Source: ABC Radio National Saturday Extra 2008-08-09 (30:00 - 45:00)
Snippet Mirror: TimCinel.com [Saturday Extra 2008 08 09 - Consumer-Based Carbon Tax]
Tags: carbon, economy, Environment, global warming, policy, tax