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With a trading based system the only change will be an ever increasing upward move in the price of carbon. When all is said and done the real cost will be carried by the consumer and not by the companies involved in producing the goods. A trading scheme will only lead to further price manipulation overall.
When the electricity system was privatised the government of the day implemented a hedging system to regulate energy prices until the full implementation of a free trading market. In those days the market price of electricity was capped at $10000 per MWHr and the average price for electricity was around $15 per MWHr. With free trade and price manipulation by all the electricity companies the max price is now capped at $12500 with the average price at around $35. Forward trading on electricity for the summer quarter is running at around $45.
Previous governments implemented a scheme of Renewable energy certificates which is not dissimilar to the Carbon offsets being discussed here. The scheme didn't work, was costly to maintain and oversee and in real terms meant very little to any Electricity provider. Any costs were just passed on to you and me while electricity company profits rose by 40%. Funny that.
The big difference between the REC system and a carbon tax was that the REC's were just held in company and were not administered by Government while a carbon tax will be a Gov based system with taxes and payments going to Government.
Call it what you like it is but another tax we as consumers will have to pay in the end.
You can rest assured China will not pay any more for coal or minerals and any price discrepancy will be absorbed by a local market. They will not slow their growth by imposing a tax such as this and again Australia will be seen as a world leader, market leader in carbon control because we won't be able to afford to produce anything for sale in the world markets.
These third world countries will step over Australia in the rush to be inovative and creative while we ponder the costs of research and development. A small hand out after the tax has been paid by us will never lead to inovation just a trip offshore.
As for a hostile Senate. They come up for election like every other polly in the country and with time for people to understand the costs and lack of benifits of another tax, they probably should enjoy their time in office as it may well be their last. To have minor parties contrlling Government is the biggest mistake we or a sitting Government can have to live up to.
I wish them all luck, they are going to need it. Moderation is the key to good government and a small minority with power is far from moderation.
Enough said. Sorry for rambling on but I have seen it all before. I have a good friend who is an Ex Fed Senator who was as green as they come and he can't believe it either. And yes he was a Labour senator who left the labour party and went independant because the Labour party wasn't green enough for him.
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