Wrong Call on Energy Costs
Source: The Australian, 20 June 2014
The RET is more expensive than carbon trading. Even climate-change deniers may shed a tear over our stillborn carbon emissions trading scheme.
The former government's policy to link Australia's scheme to Europe's, due to start next month at a paltry price of €6 a tonne, was an opportunity to enjoy all the self-righteousness of 'doing something'' about climate change without much of the cost. All along, imposing a carbon trading scheme and using every dollar of the permit proceeds to cut the bottom two rates of income tax would have been the best policy and, sold well, broadly should have kept everyone happy. Further, in the unlikely event the rest of the world, which emits the remaining 98.7 per cent of global carbon dioxide, ever agrees on a universal cap and trade system, we would have been prepared - emissions trading remains the most efficient way to limit carbon emission.
Alas, we are governed ineptly: the Coalition has expended its climate-change zeal excising the least bad policy and left us with two worse: the renewable energy target, and the nascent Emissions Reduction Fund (the crux of the Coalition's direct action policy). Plus we are still lumbered with the absurd carbon tax compensation and higher tax rates to boot.
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