What the Australian Federal government is not telling about its proposed carbon tax



The government is making numerous claims to justify imposing a tax on carbon in the face of Julia Gillard's solemn promise prior to the last election that,"There will be no carbon tax under the government I lead".

Each one of the government's claims in support of its carbon tax will require detailed scrutiny. In fact, what the government doesn't tell the public is already proving to be as revealing as what it does say.

One of the key reasons the Prime Minister uses in support of her decision to impose a carbon tax is that Australia will be left behind the rest of the world in pricing carbon, claiming, "there are more than 30 countries with emissions trading schemes and 10 American states with emissions trading schemes".

The latter reference is to the Regional Greenhouse Gas Initiative, involving a form of cap and trade scheme in 10 north-eastern and mid-Atlantic states in the US.

However, what the Prime Minister fails to reveal is that this initiative is in the throes of unravelling.

In the past few weeks, New Hampshire has taken steps to leave the scheme. One of the reasons it did so was because its state government had recently raided the money raised by this cap-and-trade fund, using it to help plug a black hole in the New Hampshire budget.

In retaliation, opposition politicians were able to gather the numbers to legislate for New Hampshire's exit from the scheme.

Similar raids on revenue from the cap-and-trade schemes to help fund general spending have occurred in at least two other states, including New York and New Jersey. Cross-party support is reportedly building to withdraw New Jersey from the scheme.

If that occurs, commentators suggest the viability of the whole scheme is doubtful. It would be at risk of total collapse.

Given the experience in the US, Treasurer Wayne Swan should be required to give a guarantee that he will not use Labor's proposed carbon tax to fund his budget black hole.

It is also worth noting that the much-heralded Chicago Climate Exchange, partly owned by Al Gore and Goldman Sachs, which was supposedly helping shape a $US10 trillion market in carbon credits, collapsed in November last year. Its last trades in credits costed carbon at 10 cents a tonne.

The Prime Minister also reminds us that the European Union has an emissions trading scheme and that Australia would do well to follow the example set by the EU.

What she fails to add is that the European police agency, Europol, announced on December 28, 2010, that it had discovered a €5 billion ($A6.7 billion) fraud within the EU's trading system. More than 100 people were arrested in connection with it.

There are other claims worth investigating. The Prime Minister is insistent that, as Australia is one of the largest emitters of carbon on a per capita basis, we must impose a tax carbon - even if larger contributors to global greenhouse gas emissions do not take significant steps to reduce emissions.

According to a Reuters report of November 14, 2010, which used data from the US Carbon Dioxide Information Analysis Centre, the top per capita emitters of fossil fuel carbon dioxide (in tonnes) in 2007 were: Qatar 51.3, Kuwait 34.0, United Arab Emirates 30.9, Bahrain 29.5, Trinidad and Tobago 27.7, Luxembourg 24.2, Brunei 19.5, United States 19.0, Australia 17.7 and Saudi Arabia 16.9.

In the context of a global picture, the level of emissions per capita is less important than total emissions.

Again Reuters has reported, based on data from the German renewable energy institute IWR, that the top national emitters of carbon dioxide (in millions of tonnes) in 2009 were: China 7426.4; US 5951.0; Russia 1534.4; India 1529.1; Japan 1225.2; Germany 796.6; South Korea 664.2; Canada 605.9; Saudi Arabia 544.4; Iran 544.4.

On this list, Australia comes in 16th, with 374 million tonnes - or 1.28 per cent of global emissions.

Taking the EU as a whole, we can conclude that 67 per cent of all emissions come from the top five emitters, namely China, the US, EU, India and Russia.

The Copenhagen climate change conference and its aftermath demonstrated that there is unlikely to be any co-ordinated effort by the big five emitters any time soon.

Imposing a tax on carbon in Australia to address our 1.28 per cent share of global emissions has the potential to cause enormous damage to our economy and our standard of living, while making little to no difference to global emissions.

Little wonder that recent polls reveal considerable opposition to yet another tax from this Prime Minister.

The Prime Minister should not impose a carbon tax without putting it to a vote of the Australian people at the next election.

In the meantime, just watch her lips.

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