Abbott’s challenges in repealing the carbon tax

Tim Wilson discusses the long-term impact of the carbon tax and the friendly environment for crony capitalism and renk-seeking that the it will breed as well as the challenges that poses for Tony Abbott.

Kurri Kurri’s situation will now be replicated all across the country. Businesses that are dependent on cheap energy will experience declining profitability and decisions to recapitalise won’t be taken. Greenfield investments also will never be made if they are exposed to the cost of a carbon tax that’s designed to annually increase. For a country that has always been an investment capital importer, the impact will be felt on job creation across the medium and long term. All of the carbon tax’s pain won’t be felt at midnight between June 30 and July 1, but it will be felt eventually.

By comparison, the “new economy” of Greens leader Christine Milne will be built off the back of the carbon tax, which acts as a subsidy for lower-emissions industries.

But it won’t be good for the economy. “Green” companies will use more investment capital to produce less, undermining economic growth. That was the experience of Spain and its carbon-based regulation that led to every “green job” in the economy coming at a cost of two jobs elsewhere.

[...]The carbon tax acts as an internal economic tariff to protect the interests of low-carbon investments at the expense of the rest of the economy.

Like traditional protectionism, the carbon tax will create a constituency of rent-seekers who will fight to protect their interests. Abbott will face a backlash from renewable energy companies claiming that repealing the tax will result in lost investment and jobs. Technically they’ll be right that their business will be harmed. But it will require them to ignore that disproportionately more investment and jobs would flow if the scheme were scrapped.

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About Climate Nonconformist

Hi, I'm the climatenonconformist (not my real name), and I am a global warming skeptic, among the few in generation Y. With Australia facing the prospect of a carbon tax, we need to be asking the simple question; where is the evidence that our emissions are causing any dangerous warming?
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4 Responses to Abbott’s challenges in repealing the carbon tax

  1. nigelf says:

    If he was smart he’d be coming out right now and publically telling these rent-seekers not to get too comfortable with this tax because it’s gone ASAP at the next election. Also advise business to do the bare minimum to stay on the side of the law with the current government until he can deliver them from this evil.

  2. RoHa says:

    “By comparison, the “new economy” of Greens leader Christine Milne will be built off the back of the carbon tax, which acts as a subsidy for lower-emissions industries.”

    “Off” the back? Surely that should be “on” the back of the carbon tax.
    Tim Wilson has been listening to too many Americans.

  3. helen says:

    The liberals should be doing more to repeal this carbon dioxide tax such as France did in 2009 and had it scrapped 2 days before it was due to begin. As for evidence of anthropogenic global warming, there is none! VOTE KATTER maybe there’s hope for Australia yet.

  4. Pingback: Who said the impact would be immediate? | Climate Nonconformist

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