Economists at Large warmly welcome the carbon tax legislation in Australia. While many people do not welcome a new tax, another way of looking at this legislation is as the end of a subsidy.
Until now polluters have been able to undertake a crucial part of their production process – disposal of their waste CO2 – for free. While we have not been paying them money directly, we have been accepting a degraded climate and the extra costs that imposes on us, to allow them to pollute. By taking away this subsidy, polluters at last have some incentive to reduce their emissions.
One hundred and fifty years ago, households and firms discharged sewage and waste water directly into the rivers of our major cities. As our cities grew this became unacceptable due to health, environmental and olfactory reasons. Slowly, due to legislation, social pressure and improved technology and infrastructure, we stopped discharging sewage into our urban rivers.
So it is with greenhouse gas pollution. With the world’s level of industrialisation and development, it is no longer acceptable to freely emit greenhouse gasses. For some time the social pressure has existed and the technology has been available. Now at last we have some agreement on potential legislation.
More information is available from the Clean Energy Future website. We plan to do a more thorough review ourselves.
http://www.cleanenergyfuture.gov.au/
Just noticed that the Government has also produced some RSA Animate-like videos explaining how all this will work on a dedicated Youtube Channel.
