Further some types of businesses such as teaching institutions will be sorely hit by the 75% increase in electricity pricing artificially forced on energy distributors.

This is simply silly. How much of that 75% has anything to do with the CPRS? Very little. No part of it is “artificial” either, including the CPRS component, should it see the light of day. What is “artificial” is the uncosted externality (a.k.a a subsidy or more precisely still a transfer payment) — being able to pollute for free if you use a fossil fuel source.

When one examines where this tranfer payment goes, it is mostly to the heavy end users of fossil energy and from all those who derive the highest relative benefit from a clean environment and climate stability.

Self-evidently, educational institutions and others can be compensated for higher costs either by relatively illiquid transfer payments.

The CPRS as configured ultimately boils down to a tax on most businesses and the rich. The business share comes through in increased prices on every thing. This is hardly a clear signal to the public other than to consume less. Further some types of businesses such as teaching institutions will be sorely hit by the 75% increase in electricity pricing artificially forced on energy distributors.

The CPRS was crappy legislation that deserved to be voted down. I give Rudd an E- for this effort, considering the time allowed for the assignment.

Fran, the Government would be issuing permits into circulation at pretty much no cost of production, and pocketing substantial revenue having provided no useful benefit to the purchasers.

This, coming from someone holding himself out as being some sort of economic pragmatist, is astonishingly illiterate.

In the end, all costs imposed settle on end users. All levies on the population come out of the maximum capacity to levy. In this case, all the revenue and then some is being handed back. Now ultimately, I maintain that the transaction costs of the exercise as currently configured are excessive, and that the current reward structure does not approach anything that could be described as pareto optimal but for the record government here is not “pocketing” anything. It’s building an expensive ring fence that is full of holes just big enough to catch the wrong targets.

Really, your claim is the flipside of those silly claims that corporations rather than individuals should pay taxes or charges, when in the end, corporations and individuals are all in the same broad system of exchange.

The more lost in lala land they are the smaller the chance their political leaders have of ever getting back into power.
I call it the Abbott ratio.

Pricing carbon merely ends the free ride. Business has known about AGW for 20 years, and the probability of an ETS for 10 years.

No one should be surprised, except by the government’s excessive and wasteful desire to direct resources to the old economy.

The CPRS is a tax in the sense that a “drain on resources” is “taxing”. To the people who primarily carry this load “tax” is what they will be thinking. Who carries this load? Well, anyone who doesn’t get compenstion of course. That is a little hard to follow as there are so many compensations, but it settles down to being most businesses, and the rich. These groups are going to see the cost of CPRS compliance as a tax. Business will adjust prices and pass the cost out to the general economy. The rich will pay the direct higher prices (water, electricity, food) and take the second slug from general price increases. The general public only see the general price increases as well as the electricity price hit but get compensation, supposedly.

The sad thing about this sad piece of legislation is that it is unimaginably inefficient and makes as much sense as the Honda ad which shows a falling domino like series of events to eventually tip a platform to make a car roll forward a few feet. An engineer would see a process as indirect as the CPRS is as requiring a massive amount of energy applied to achieve a very small impact at the target, with most of the original impact being lost to compounded inefficiencies at the various stages of the process. Here you bring out the line that “this is about changing people’s behaviour”. Certainly the doubling of electricity prices (75% increase near enough) will change something, but I argue not what you imagine. Certainly there will be an encouraging move to solar waterheating, but a new air conditioner will be added for a nett zero change to energy consumption. Then the wall plug in electric vehicle will arrive. Definitely something will have to give way to allow for the higher prices not compensated for, but it will not be in energy consumption.

As for the notion that people will move to use public transport in place of private vehicles, to that I say that our cities are no longer designed for such a change. People’s travel distances, travel routes, and travel time allowance’s will not allow for this.

But most importantly, people should not need to change their energy consumption behavior in Australia. This country has boundless amounts of renewable clean energy, it simply needs to be collected and shared out. And a levy on the principle commodity is the only fair, direct, efficient, and natural method to
provide the investment to achieve this goal with absolute cerrtainty. And it is certainty of change that science is telling us that we need.

Fortunately Abbott has yet to focus on the massive inefficiency of the CPRS. This should say something about his analytical skills. But if he does work it out he will have no trouble demolishing the CPRS in the public’s mind. Think about how it will sound, $22 billion per year syphoned off through electricity alone by 2013, and not a single tonne of CO2 release prevented. That should not be hard to be made to look like the nonsense that it is, especially for someone as unconstrained by factual detail as Abbott is.

Fran, the Government would be issuing permits into circulation at pretty much no cost of production, and pocketing substantial revenue having provided no useful benefit to the purchasers. In contrast, when you puchase shares or stock, you have something of real value for your money!

a way of making firms and households pay for the social costs of the pollution their actions generate

Yes. People understand that wasting water is anti-social and they support restrictions pretty much – so this should be achievable with carbon pollution too.