To tax or not to tax, that is the question

Does a carbon ‘price’ mean a carbon ‘tax’?

The government’s Multi-Party Climate Change Committee met recently for the first time. It was interesting to hear the opening position of the committee: that a carbon price is necessary to reduce emissions. They went on to encourage investment in low emissions technologies and to complement its existing programs.

So the question is not whether there should be a price on carbon but, rather, how that price should be applied.

This takes us to the field. Let’s consult the major players.

The government has, therefore, established two new roundtables – one representing business and the other with Non-Government Organisations (NGOs). The business roundtable comprised key players from right across the economy: mining, transport, manufacturing, energy, retail and banking.

The NGO roundtable, on the other hand, includes leaders from across the community sector: unions, social services, environment groups and local government.

This is good initiative by government – engaging across the spectrum will likely ensure the views of business and the general community are front and centre as the government progresses this important economic reform.

Even if the starting premise is agreed, there is still so much to be worked out. A carbon tax or an emissions trading scheme, a full emissions trading scheme or a limited emissions trading scheme? What price to put on carbon? How much, if any, assistance should be paid to emissions intensive industries?

Given the problems the draft ETS had in getting agreement, it will be interesting if the committee and the roundtables can build a consensus this time around.

We’re conducting a survey at the Institute which will run for another week, asking for members’ position on the topic of carbon tax.

http://www.surveymethods.com/EndUser.aspx?B490FCE6B6F5E6E7B1