Emissions trading to replace Australian ‘carbon tax’
Carbon Tax: what’s in a name?
On 16th July 2013, Prime Minister Kevin Rudd announced that Australia would switch from a fixed price ‘carbon tax’ of $24.15 / tonne CO2-e to a floating price based on the European permit price. Interestingly, this was exactly 5 years to the day, that the former Rudd Government launched its Green Paper on a Carbon Pollution Reduction Scheme). Back then, I supported a price on CO2 but objected to the ‘carbon tax’ moniker which I thought misrepresented what was a reasonable pricing mechanism to encourage companies and individuals to cut CO2 emissions. The term ‘carbon tax’ was used heavily by the Federal Opposition, and particularly by its leader, Tony Abbott. Of course, Abbott’s aim was to damage the government and discredit the CPRS, but perversely I think Tony Abbott unintentionally helped the CPRS / carbon tax to achieve it’s goal of cutting CO2 emissions.
How?
- By calling the CPRS the ‘carbon tax’ Abbott and his shadow cabinet made people think of the scheme as a tax.
What do people like to do about tax? They like to minimise their payment. Voila. Call it a tax and people will avoid it.
And how can they do that? By using less energy. And that’s what people and businesses have been doing since the CPRS came into effect on 1 July 2012. - By mentioning the CPRS / carbon tax at every opportunity, the Opposition ensured that the scheme stayed front-of-brain, further reinforcing the message that the tax was there.