16082011

Why Carbon Tax?

Why Carbon Tax?

Why do we want a Carbon Tax? This is a very good question and we will attempt to answer it.

1. We want to save the environment...

Saving the environment is all well and good, but is a Carbon Tax actually going to do this - we think not. Simply put it is a very indirect way of causing change in the environment. For instance did you know that the impact the tax will have on the global climate is at tops just 0.00007 degrees?  Seems a lot of money for very little end result don't you think?

Also given the Tax on Carbon is taxing an 'end result' - its quite likely that there will be unforeseen consequences for people and the environment -i.e. your action in fixing one thing results in a problem some where else. No wonder economists find the study of taxes and incentives such a fascinating area.

2. We need to develop our local green industry

Actually, the trouble with the Carbon Tax is that it will send exactly the wrong signal into the market to create a strong and independent green business sector. For starters government backed money or grants are always seen as 'easy money' - it often comes with very little strings attached. This in of itself will cause a whole generation of 'grant focused' businesses being set up with very little focus on their long term business models. Anyone remember what happened when the Pink Batt's grants stopped - yep, a whole load of businesses went to the wall at their fundamental business models can't work without the government money to hold them up.

Also the other problem is that even if we do somehow get some proper businesses out of this mass money free for all - they will have to compete on the global stage. This is very hard to do, as shown by the recent collapse of Evergreen in the US.

Myself I would prefer to see the government take GST off solar hot water heating and geothermal heat recovery systems, these have a direct positive environmental impact - although you don't need to put in place a massive Carbon Tax to get such useful benefits...

Follow the money...

Basically, I think this tax has more to do with wealth redistribution and a government trying hard to buy itself into the nest election...



As for the end result in this for the environment, its going to do very little positive. In fact I think its more likely to do more harm to the environment over the longer term than anything - people are going to be left with a very bitter aftertaste if the Carbon Tax does go ahead and that will set back rational sensible environmentalism many years.