Are we all looking forward to the Carbon Tax?

[rhancock]

But petrol has already increased by 50%, by how much has that reduced your driving?

Nice theoretical exercise, but the real world is different..............

Maybe I'm not your average guy, but I take my kids to the shops on the bus these days, I cycle to work and uni 4 days a week instead of 2 days a week, the kids complain that we can't go to the big park we have to drive to, they can only go to the park around the corner. And, yes, I'm giving up trade work, and working in an office, but I did seriously consider buying a bike like that and filling it with tools and materials!

When it came down to spending an extra $20 on petrol or getting an indian take away on Sunday night, I made a choice - that is the point of an emissions trading scheme - getting people to change the choices they make.

[chrisp]

But petrol has already increased by 50%, by how much has that reduced your driving?

Nice theoretical exercise, but the real world is different..............

Big Shed,

Probably not much for me, but it seems to be having an impact in Melbourne. Have you heard about the over crowded public transport system?

I use about 30~40 litres per month in petrol so the cost of fuel doesn't really impact on me too much. I know others who travel further and they have switched to using public transport. I suspect we are at the point were more people will move to public transport as the cost of petrol rises.

[bsrlee]

Interestingly, in the last week I have seen a 'report' from a group of 'scientists' backed up by some pretty good 'facts' and 'statistics' that calls for the wholesale removal of trees from the arctic regions are they are a 'major' contribution to global warming & have caused the Arctic to warm at twice the 'global average'. Seems the evil trees are both reducing the amount of snow, increasing the amount of snow during summer, reducing the reflection of heat & increasing the soil temperature causing bacteria to thrive & release CO2.

Yes, it seems you can have it both ways.

[Big Shed]

I actually asked by how much the 50% increase in petrol cost had reduced your weekly driving.

Good to see you making those sort of choices, although they are probably not all driven by a concern for the environment.
For instance, I choose to drive a car powered by LPG and therefore have less of a carbon impact than if I drove a petrol or diesel powered car. However that choice is as much driven by economic factors as it is by environmental factors.

Now, surely you are not suggesting that all tradies should give up trades work to reduce emissions and go work in an office? Likewise, whilst city people can choose to go on their bike to work or uni, country people cannot. Any carbon/emissions tax will, of necessity affect country people more. Country people also do not, in the main, have access to public transport, but still pay their taxes to subsidise city office workers to travel to work.

The point I, and others, are trying to make, is that we should be careful not to jump the gun and act too soon. If we do that we put ourselves at a disadvantage economically and we all still have to pay the bills, even people that work in an office.

[m2c1Iw]

But I disagree with the way us earthlings are going about reducing it. Without all countries coming on board, reducing or at least stopping overpopulation and reafforesting the worlds forest, its all just feel good crap.

Can anyone please explain how our government intends spending the carbon tax. The announcements talk about carbon trading however as I see it this title is simply code for tax so where will it go.

Sure increased prices will force behavioural change no doubt about that but why does little old Oz need to be the pace setter at the expense of our standard of living. Yes self interest exposed.

But look at how successful our leading the charge on free trade has been in all but removing manufacturing from Australia. A slightly different debate but I can't help draw the parallel.

So I'm all ears or should I say eyes, how will it work

Mike

[rhancock]

I actually asked by how much the 50% increase in petrol cost had reduced your weekly driving.

Didn't I answer that? Or do you want to see my log book?

Good to see you making those sort of choices, although they are probably not all driven by a concern for the environment.
For instance, I choose to drive a car powered by LPG and therefore have less of a carbon impact than if I drove a petrol or diesel powered car. However that choice is as much driven by economic factors as it is by environmental factors.

I didn't ever say my choices were driven by a concern for the environment. Some are, some aren't, most are a bit of environment with some economics thrown in.

Now, surely you are not suggesting that all tradies should give up trades work to reduce emissions and go work in an office? Likewise, whilst city people can choose to go on their bike to work or uni, country people cannot. Any carbon/emissions tax will, of necessity affect country people more. Country people also do not, in the main, have access to public transport, but still pay their taxes to subsidise city office workers to travel to work.

No, I didn't suggest that either. I don't want it to turn into a country vs city argument either. I thought about listing all the people who will be impacted by higher energy costs more than the average, but the list is long and is topped by anyone living outside of metro Australia, so I agree with you that country people will be affected more. As well as tradies. And anyone with a disability, or caring for a someone with a disability. Or pregnant women. Or anyone with a heavy load to move. and trucking companies. and... and...

Its a long list but it doesn't change the point I'm trying to make (see below).

The point I, and others, are trying to make, is that we should be careful not to jump the gun and act too soon. If we do that we put ourselves at a disadvantage economically and we all still have to pay the bills, even people that work in an office.

Over 20 years ago I started reading reports about global warming and the impacts it was likely to have. Is waiting 20 years jumping the gun?

The point I am tryig to make is that each of us has a certain amount of choice in how we do what we do. Since LPG is very fuel efficient for lots of short distance trips, most tradies would be able to justify the choice when they buy the next vehicle. People living in the country might be able to car pool for some journeys. Or buy some products online. Or drive to the train. Or something else...

We all make choices. Emissions trading is about influencing some of those choices.

Editors Note: Bold text removed

[rhancock]

Can anyone please explain how our government intends spending the carbon tax. The announcements talk about carbon trading however as I see it this title is simply code for tax so where will it go.

Sure increased prices will force behavioural change no doubt about that but why does little old Oz need to be the pace setter at the expense of our standard of living. Yes self interest exposed.

But look at how successful our leading the charge on free trade has been in all but removing manufacturing from Australia. A slightly different debate but I can't help draw the parallel.

So I'm all ears or should I say eyes, how will it work

Mike

Its not a carbon tax. You don't pay money to the government.

If a company is emitting more than a set level of carbon, they have to buy a permit from another company which is emitting less carbon. Since (coal generated) electricity and oil companies will emit more carbon, they will need to buy a permit, and so they will pass that cost on to consumers.

The only money the government can get is by auctioning the first set of permits, which could net up to $20 billion for the government. Its most likely the government will use that money to compensate those affected more than the average. If they compensated half of the poplation, you'd get $2000 each, as a one off payment.

Once that money is gone, there is no more income for the government.

[echnidna]

<-- How Far To The Edge Of The World ? -->

[chrisp]

I actually asked by how much the 50% increase in petrol cost had reduced your weekly driving.

I think costs have to go up way beyond a 50% increase to have a significant impact, but it will happen - it's just a question of when.

Part of the problem, I think, as that we have all become a bit spoilt with the relatively low cost of energy. It doesn't really matter if you talk petrol, gas or electricity - they are all dirt cheap!

Let me repeat that - dirt cheap - do you believe it?

If I asked a average person to work for the equivalent cost of the energy they produce, I'd be charged with exploitation.

For example, a 80kg person running (i.e. hard work) for 8 hours consumes:

30 kJ/kg/hr x 80kg x 8 hr = 19200 kJ

Their useful work output would be far less, but we'll use input figures for this exercise (pun ).

Electricity costs the average household about $0.14/kWh

1 kWh = 60 x 60 kJ = 3600 kJ (=$0.14)

The cost in electricity per kJ:

$0.14 / 3600 = $0.0000389

Cost of energy used by a 80kg person running for 8 hours:

19200kJ x $0.0000389/kJ = $0.75

If that person was paid at the going rate for the work they do at the same rate we typically pay for electricity, they'd earn less than:

$0.10 per hour

I suspect most of us produce far less output (=energy) in a typical day. Would you be willing to work hard for 8 hours to be paid less than $0.10 per hour?

I'm sure the energy cost per unit for petrol is higher, but I'm an electrical engineer, not a chemical engineer

The point I'm trying to make is that we have under valued the true worth of our energy supply. We are using energy sources that took millions of years to produce and burning it up like it costs nothing.

[Big Shed]

Over 20 years ago I started reading reports about global warming and the impacts it was likely to have. Is waiting 20 years jumping the gun?

The point I am tryig to make is that each of us has a certain amount of choice in how we do what we do. Since LPG is very fuel efficient for lots of short distance trips, most tradies would be able to justify the choice when they buy the next vehicle. People living in the country might be able to car pool for some journeys. Or buy some products online. Or drive to the train. Or something else...

We all make choices. Emissions trading is about influencing some of those choices.

Editors Note: Bold text removed

I wasn't having a go at your personal choices, merely pointing out that we all make choices, some out of necessity, others as real choices. If you decide to convert an Indian takeaway in to a petrol purchase, that is your choice (and perhaps better for the environment as Indian takeaways have been known to produce the odd bit of emissions)

When I talk about people in the country having fewer options, I do that from the point of view of someone who lives in the country, just as you obviously do as a person who lives in the city. Point here is that it is not a case of "one size fits all".

When I talk about "jumping the gun", I am not saying that we should not do anything, far from it. What I am saying is that we should not throw out the baby with bath water and disadvantage the country as a whole economically.

When you say that the government collecting 20 billion for emissions permit is not a tax, that is what most people would call "spin". Of course it is a tax, it money collected by government by compulsion, if that isn't a tax, then the GST is a "surcharge".

[Big Shed]

Its not a carbon tax. You don't pay money to the government.

If a company is emitting more than a set level of carbon, they have to buy a permit from another company which is emitting less carbon. Since (coal generated) electricity and oil companies will emit more carbon, they will need to buy a permit, and so they will pass that cost on to consumers.

The only money the government can get is by auctioning the first set of permits, which could net up to $20 billion for the government. Its most likely the government will use that money to compensate those affected more than the average. If they compensated half of the poplation, you'd get $2000 each, as a one off payment.

Once that money is gone, there is no more income for the government.

As it happens I am just reading a report in today's Age, which quotes Ross Garnaut as saying "the government will eventually collect $20b A YEAR". This is confirmed by modelling by the Climate Institute. Wayne Swan has said that "every penny will be spent on households". Remember that when the GST was introduced the states would get rid of taxes such as stamp duty, yeah right!

[m2c1Iw]

Its not a carbon tax. You don't pay money to the government.

If a company is emitting more than a set level of carbon, they have to buy a permit from another company which is emitting less carbon. Since (coal generated) electricity and oil companies will emit more carbon, they will need to buy a permit, and so they will pass that cost on to consumers.

The only money the government can get is by auctioning the first set of permits, which could net up to $20 billion for the government. Its most likely the government will use that money to compensate those affected more than the average. If they compensated half of the poplation, you'd get $2000 each, as a one off payment.

Once that money is gone, there is no more income for the government.

OK I get that much but what happens when a goal burning generator cannot find someone to buy permits from. Do the government keep issuing as per the start up or do they shut down.

Second point as I asked in my previous post what will happen to the $20 billion its OK to say we'll compensate low income families but how, when and how much. What is the level of cap that they talk about. There is way to much hand on heart trust me in this one, at least with the GST we knew the amount despite the fact the State governments reneged on many of the tax offsets.

I just hope we don't see more of hand outs to companies like we have seen in the Toyota case. One off grants do not ensure viablility to an industry and don't get me started on why we gave $35 mil out of the green inovation fund to Toyota. Yes it is a small amount in the scheme of things just window dressing really but the technology is old hardly inovative and studies prove it is not as environmentaly friendly as it is promoted.

So I am still doutful, unconvinced and lacking enough information to understand how it will not harm our economy.

Mike

[rhancock]

It isn't collected by the government. In fact they haven't actually decided to auction the permits yet, they're still thinking about giving them away. In which case there would be no money going to government at all.

Still the most likely case is that in the year the trading starts, the government will auction the permits and get a windfall of $20 billion, which is a lot of money. And yes you can see that as a tax if you insist, but it is a one off tax, never to be repeated, and there will be an enormous compensation package to pay for - maybe it'll be as big as the windfall and maybe it won't, but it will be one off. After that the government gets no income and so is unlikely to pay any more compensation.

[Big Shed]

I think costs have to go up way beyond a 50% increase to have a significant impact, but it will happen - it's just a question of when.

Part of the problem, I think, as that we have all become a bit spoilt with the relatively low cost of energy. It doesn't really matter if you talk petrol, gas or electricity - they are all dirt cheap!

Let me repeat that - dirt cheap - do you believe it?

If I asked a average person to work for the equivalent cost of the energy they produce, I'd be charged with exploitation.

For example, a 80kg person running (i.e. hard work) for 8 hours consumes:

30 kJ/kg/hr x 80kg x 8 hr = 19200 kJ

Their useful work output would be far less, but we'll use input figures for this exercise (pun ).

Electricity costs the average household about $0.14/kWh

1 kWh = 60 x 60 kJ = 3600 kJ (=$0.14)

The cost in electricity per kJ:

$0.14 / 3600 = $0.0000389

Cost of energy used by a 80kg person running for 8 hours:

19200kJ x $0.0000389/kJ = $0.75

If that person was paid at the going rate for the work they do at the same rate we typically pay for electricity, they'd earn less than:

$0.10 per hour

I suspect most of us produce far less output (=energy) in a typical day. Would you be willing to work hard for 8 hours to be paid less than $0.10 per hour?

I'm sure the energy cost per unit for petrol is higher, but I'm an electrical engineer, not a chemical engineer

The point I'm trying to make is that we have under valued the true worth of our energy supply. We are using energy sources that took millions of years to produce and burning it up like it costs nothing.

Thank you, that is an interesting way to put in perspective the real cost of electricity. So a labourer, say, should there fore be paid more than an office worker?

[Big Shed]

It isn't collected by the government. In fact they haven't actually decided to auction the permits yet, they're still thinking about giving them away. In which case there would be no money going to government at all.

Still the most likely case is that in the year the trading starts, the government will auction the permits and get a windfall of $20 billion, which is a lot of money. And yes you can see that as a tax if you insist, but it is a one off tax, never to be repeated, and there will be an enormous compensation package to pay for - maybe it'll be as big as the windfall and maybe it won't, but it will be one off. After that the government gets no income and so is unlikely to pay any more compensation.

All you need to know about Garnaut, see under "the Government must be making a lot of money.........." about 2/3 down