Why the carbon tax doesn't work
Australia will not reduce carbon emissions by raising power prices via taxes. Instead we should be investing more in making renewable energy cheaper.
A group of Nobel Laureates and other top experts who combined to form the Copenhagen Consensus believe that the world’s emphasis on emissions reductions via carbon pricing and similar mechanisms, is simply not going to work. They propose a cheaper but more radical global solution.
The Copenhagen Consensus was formed in Denmark to bring together top global knowledge to determine the best way to allocate funds to solve particular problems. They have applied their methods to a number of global problems. For example, they concluded that the most economic way to reduce global poverty was to make sure that pre-school children have sufficient nutrition. Without pre-school nutrition, adult capabilities are greatly reduced and they are much less productive members of the community.
When it comes to carbon, they concluded that because electricity had become essential to the current living standards of a vast number of people on the globe, simply pricing electricity at higher levels would not make an enormous difference to usage.
Australia has one of the world’s largest carbon taxes, which is being combined with big rises in power costs. Accordingly, we are a global leader in trying to reduce emissions via electricity pricing. The Copenhagen Consensus believes our strategy is not economic and while electricity consumption may reduce, the cost of that reduction will be out of proportion to the emissions cuts.
The head of the Copenhagen Consensus, Bjorn Lomborg, came to the ADC Hayman Leadership Retreat and explained that the Copenhagen Consensus believes there is a better way to cut emissions – spend more money researching renewable power generation with the aim of reducing renewable electricity generation costs to levels that are lower than carbon.
Currently both wind and solar do not have economic storage systems, so in the case of wind there has to be expensive back up carbon sourced power generation. Bjorn Lomborg sets out his views in the attached video.
From my point of view, he is one if the first people I have heard who makes sense on carbon. Certainly putting up electricity prices in Australia by 30 or 40 per cent (only about one third is the carbon tax) is not going to vastly lower emissions.
What it does do is lower the standard of living of many Australians and is now causing them to challenge whether the carbon/climate links have validity.
There are a number of renewable research projects here and around the world which are getting closer to substantially lowering the cost of renewable energy.
If the Copenhagen Consensus is right then that’s where the world needs to focus if it is to be serious about carbon and climate.