Jul 15, 2011

Quiggin: the average household will barely notice carbon tax

It follows that, although the carbon tax will have a significant impact on our aggregate emissions of CO2, mainly through its impact on electricity generation and energy use by business, the average household will barely notice it, writes John Quiggin, an ARC Federation Fellow in Economics and Political Science at the University of Queensland.

The Opposition Leader Tony Abbott is not easily embarrassed, but he showed a tiny bit of embarrassment when he had to concede that he could not find a single reputable economist to back his proposal for a “direct action” scheme to reduce CO2 emissions. By contrast, large majorities back one or other of Abbott’s numerous previous positions on the issue, supporting a carbon tax, an emissions trading scheme, or some hybrid of the two.

An informal poll held at the Australian Conference of Economists found that only 11% of attendees supported “direct action”, while 80% favoured price-based mechanisms. From my discussions in the profession, I would say that the 11% is an overstatement, and that those who responded this way fall into two groups:

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4 thoughts on “Quiggin: the average household will barely notice carbon tax

  1. jimD

    If any of Julia’s minders are reading, they should go to the boss and try to engage John Quiggin for their carbon tax selling plan. He gets the facts right, and he is able to explain in very simple language how the carbon tax will work, and how it will affect the general public; these are the questions that people are asking, and in response at present are getting hopelessly confused spin from the government, and panic-mongering garbage from Tony Abbott.

  2. Harvey Tarvydas

    Dr Harvey M Tarvydas

    Very well done John Quiggin, and without taking anything thing away from you, well done Crikey for being on the lookout.
    While so many I speak to are all fired up on to the 2 cents here and 1 cent there cancerous debates nearly everyone has missed the quite massive tax savings they’ll enjoy ($6,000 changed to $18,000 tax free for rich [even more] and poor)
    Is there a toxic monk or abbott out there somewhere sending our people mad.

  3. Peter Ormonde

    Nice piece John.

    A couple of weeks after the price is implemented, no one will remember what all the fuss was about. It is an exceptionally clever piece of policy (and political) engineering.

    And – as expected – Julia Gillard is managing to get this through when she gets the chance as evidenced by her performance on Q&A. A gutsy player.

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