A difficulty is that the carbon tax proposal – despite it being good policy in my view – was not Labor Party policy going into the last election.    At a stretch it can be argued that a Labor Government was not elected but rather a Labor Government in coalition with Greens and independents so that things have changed.  Australia will of course get the chance to vote on this pricing measure at the next election.  

I hope the measure does not get ambushed by unthinking ec0nomics critics – it will have enough foolish opposition from those who reject the climate change science because of their political priors or because of their political opportunism.  I was a bit distressed to see the following report attributed to Warwick McKibbin in this morning’s Australian. I hope it is an instance of the Australian’s slack journalistic standards and not an attack by Warwick on the proposed policy:

“Australia’s leading climate change economist Warwick McKibbin said it had been established that the only carbon abatement in Europe had been the result of regulation and subsidies, which had boosted the use of solar and wind power.  A carbon price is just a pure cost and gives you little incentive to avoid it unless you know what will happen in the future,” he said.

He said a carbon tax was preferable to an emissions trading system, because it conferred greater certainty, but it was really only an interim step.”

We don’t need these types of comments when the proposal has not even been fully specified – you cannot judge pricing effects when the scale of price changes is yet to be announced.  It is important to get a pricing policy up and running. As Ken Henry remarked last year the likely effect of such comments is to reduce the chance that anything at all will happen. 

If his comments have been taken out of context Warwick should correct them. If he is quoted in context then I think he is just wrong. If Warwick is saying that we need long term political agreement bon the case for carbon pricing from both political parties I agree.  It is long term expected prices that really matter not current carbon prices.

Update 1: There is something of a squabble developing over whether the carbon tax should be applied to fuels.  A $20 per tonne carbon tax would translate into about a 6 cents per litre tax on petroleum fuels.  Currently the fuel excise is 38.143 cents per litre  so including an additional carbon levy is  not going to substantially alter the way government impacts this sector.   The advantage of imposing an additional tax now is that bit can be ramped up as the price of carbon rises through time.

Update 2: Here is Geoff Carmody on the case for designing a carbon tax that attacks the consumption of carbon emissions in Australia. A case I strongly support.  I don’t agree with the title of this piece but the rest is right. We should introduce border taxes and compensate exporters for the taxes they directly or indirectly pay on carbon.  I cannot see any case for compensating the producers of  domestically produced nontradeables such as electricity and I’ll bet a lot of subsidies end up going exactly there. Malcolm Maiden discusses the case for border taxes on steel imports  (among other things) in The Age.  Among other things it reduces the need for explicit financial compensations for local producers. Craig Emerson gets it wrong on BTAs dismissing them as protectionism.  That they are not. He wants to hand out subsidies to local firms affected by import competition.  That is clearly a second-best option.

”For the extreme left it provides the opportunity to do what they’ve always wanted to do – to sort of de-industrialise the Western world,” he said. ”The collapse of communism was a disaster for the left and really they embraced environmentalism as their new religion. For years the left internationally have been very successful in exploiting people’s innate fears about global warming and climate change.”

The difficulty with the position of Minchin is that these lunatic views – which contradict all science and border on the paranoid – make it difficult to treat anything at all he says with credibility.  He is both wrong and ignorant.

Tony Abbott and many others openly showed the same degree of ignorance.  All the usual wrong denialist lies. Abbott also warns he is concerned the world is not ‘jumping on a bandwagon or being taken in by a fad’. ‘We embraced the policy then for good reasons which means that it’s uh not a crazy policy but that doesn’t mean we can’t modify the policy or change it or even abandon it should that be our current judgment’.

These clowns had the responsibility to inform themselves on climate science. 

My assumption after last night’s show is that the CPRS legislation will be defeated in the Senate which will lead to a double dissolution of parliament, the probable end of the Turnbull leadership and a desperate fight for survival and distinctiveness among the Nationals.

Hopefully the Liberals and the Nationals face a decisive defeat in both houses with Labor being left to deal with an enhanced Green vote.   The major concern is that these stupid views will infect the public with further skepticism regarding the issue of climate change.  Labor can win the election decisively but at the expense of a more polarized electorate.

Unless Turnbull is able to engineer a major change of heart in his delusionist colleagues, I will be part of that polarization. For the first time in 30 years I will not be voting for the conservative side of politics at the next poll.

The reported remarks of Tony Abbott that the arguments on climate change were “absolute crap” -  seem deeply disturbing. However his later remarks that an active ETS can be justified on the basis of an insurance principle – close to being sensible scepicism – suggests he may have been taken out of contexct. I’ll wait and see on this one.