tag:blogger.com,1999:blog-3692282252844489453.post9166751629632920243..comments2024-03-01T18:58:48.605-08:00Comments on What'sUpWithThatWatts, et al.: WUWTBlog: "50 times more expensive! Don’t make me laugh!" citizenschallengehttp://www.blogger.com/profile/04559990934735912814noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-3692282252844489453.post-47843845516795589382013-09-06T07:20:13.642-07:002013-09-06T07:20:13.642-07:00"As someone pointed out in a comment on an ea..."As someone pointed out in a comment on an earlier post, the Australian carbon tax was intended to be revenue neutral. It was simply moving the tax burden from something else, onto carbon."<br /><br />As that someone was me, let me explain my comment a bit more. What I wanted to show by an <a href="http://rationalwiki.org/wiki/Reductio_ad_absurdum" rel="nofollow">argument ad absurdum</a>, that you cannot take the revenue of a carbon tax as the cost of a carbon tax. <br /><br />Thus I stated that a typical carbon tax is revenue neutral as it reduces other taxes, typically on labour. In the reasoning of Mockton this would mean that reducing CO2 can be done for free. This is naturally nonsense. The costs will be a fraction of the carbon tax, however.<br /><br />Also your example of an extremely high carbon tax shows the error in Monckton's thinking. If you make the carbon tax high enough you can get to a point where no one will use fossil fuels any more and the revenue of the carbon tax will be zero (<a href="http://en.wikipedia.org/wiki/Laffer_curve" rel="nofollow">Laffer curve</a>). In Mockton's reasoning this would again mean that carbon reduction could be done for free, which is clearly nonsense.<br /><br />The revenue of a carbon tax can not be used to estimate the costs of carbon emission reductions.<br /><br />As an aside, someone of WottsUpWithThatBlog replied that the Australian carbon tax is not revenue neutral, but that part of the funds are used to stimulate renewable energy. Interesting, but it does not refute the argument ad absurdum. <br /><br />As a second aside, as a carbon tax is often used to reduce the tax burden on labour, it could lead to reductions in unemployment. Economic theory says that if something is cheaper you use more of it. Thus, especially in countries with a social system, a carbon tax could well be good for the economy and stimulate growth. I do not want to think what this would mean for Mockon's argument.<br /><br />"The Australian carbon tax was associated with revenues of about $13 billion and was expected to reduce carbon emissions by 5%."<br /><br />That is another error. Without carbon tax the carbon emissions would have grown. Thus the counter factual is not zero growth and the true emission reductions will have been larger than 5%.<br /><br />I almost feel bad for the WUWT idealists that voluntarily contributed their hard earned money to this video. Victor Venemahttps://www.blogger.com/profile/02842816166712285801noreply@blogger.com