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Dear Australia: Replace the Carbon Tax with . . . NOTHING (don’t cream consumers at the credit casino)

“Australia’s proposed Emissions Trading System is a variable and unpredictable carbon tax…. ETS is complex in operation; encourages brokers, lawyers and speculators; and will drain our money to middlemen and into the European carbon credit casino. And it will create a growing army of vested interests who will forever oppose its abolition.”

Australia’s destructive carbon tax is in full political play this election season. “If this election is about anything, it is about the carbon tax,” opposition leader Tony Abbott stated this week. “Getting rid of the carbon tax is fundamental to our plan for a stronger economy.”

At his candidacy’s home page, Abbott states (and promises):

Repealing the Carbon Tax will ease cost of living pressures on families, help small business and restore confidence to the economy.

On day one, the Finance Minister will notify the Clean Energy Finance Corporation that it should suspend its operations and instruct the Department of Finance to prepare legislation to permanently shut-down the Corporation.

I expect that the Parliament will respect the mandate of the people and repeal the Carbon Tax. To oppose the mandate of a government elected on a platform of abolishing the Carbon Tax would be as reprehensible as the [Julia] Gillard Government’s action to introduce a Carbon Tax without a mandate from the people.

Unlike the Prime Minister, I mean what I say: there will be no Carbon Tax under a government I lead.

Repeal, Don’t Replace

But Abbott’s forward steps are joined by a step back. “As soon as the Carbon Tax is repealed, the Environment Minister will introduce legislation to enact the Coalition’s Direct Action Plan on climate change and carbon emissions,” he promises. Seen as a no regrets policy, DAP involves incentives to invest in energy and emissions technology, close 2,000 MW of coal generation, increase soil carbon storage levels, and plant carbon-absorbing trees.

But worse is an emissions trading replacement promised by the Australian Government (and supported by the Labor Party). Comparatively, the carbon tax is a known amount, simple in principle, needs no bankers or brokers, and all receipts end up in Australian hands. And it is easy to abolish at any time.

Australia’s proposed Emissions Trading Scheme  is a variable and unpredictable carbon tax. An ETS would create tremendous business uncertainty. It would be gamed to profit-maximize under regulatory constraints.

ETS is complex in operation; encourages brokers, lawyers and speculators; and will drain our money to middlemen and into the European carbon credit casino. And it will create a growing army of vested interests who will forever oppose its abolition.

Neither the fixed tax nor the vacillating tax will have any beneficial effect on climate.

Credit Casino

It’s time to expose the corrupt carbon credit casino. In this casino, producers are forced to pay for emitting the same harmless, colorless, non-polluting, natural gas of life that every human produces in his lungs with every breath.

At the same time, other smarties are paid to promise they will not emit the gas they intended to emit tomorrow.

The size of this carbon tax paid by Australian business will reflect speculations in the ETS of old Europe, where the carbon scam started. Foreigners will collect much of it.

Hansen: Australia Beware!

James Hansen, yes that King of Climate Alarmism, has lambasted cap-and-trade on the U.S. side, both proposed (federal side, defeated) and actual (California, implemented).

“Cap-and-trade’s complexity provides a breeding ground for special interests…. Why do those special interests deserve it anyhow?”

- James Hansen, “The People vs. Cap-and-Tax,” New York City, January 12, 2010.

“You don’t want [California's] system with caps, where you have trading, you have derivatives, you have markets that then collapse and don’t actually reduce emissions much. That’s been tried in Europe, and it didn’t do much.”

- James Hansen, quoted in David Baker, “James Hansen Blasts Cap-and-Trade,” San Francisco Chronicle, December 5, 2012.

Here are some other gems from the same Hansen paper (summarized here) that Australians should take to heart:

“The Waxman-Markey and Boxer-Kerry cap-and-trade bills in Congress are larded with 2,000 pages of give-aways to special interests, soaking the public who must pay higher energy prices.”

“What is the chance that a United States cap-and-trade law could be a precursor for a global agreement? Zero. There is no chance that China will accept a cap. Nor should they. They are still in the early phase of their economic development.”

“[Paul] Krugman says that my suggestion that carbon trading will be an open invitation to Wall Street to again pillage the financial system ‘is bizarre.’ What is bizarre, in my opinion, is his implicit presumption that government regulators can outwit Wall Street executives.”

“Congress can write a cap-and-trade bill that tries to exclude Wall Street. But to think that Wall Street will not get involved in carbon profits, directly or indirectly, is naïve. This is a free country. Wall Street banks can buy the companies most affected by carbon price.”

“Congress is accustomed to working with special interests. There is a revolving door between Congress and lobbyists. Ex-members know the Washington ropes. The lobbyists wrote most of the pages in the 2,000-page bills in Congress.”

In the middle of the ETS casino, empires of bankers, brokers, speculators, lawyers, auditors and regulators will wax rich by clipping every transaction, and an army of bureaucrats and academics will feed on the government windfall.

And at the end of this feed chain, innocent consumers get creamed.

All of this confirms that we live in a political madhouse. Australia tried and failed with a carbon tax–the best path is to replace the tax not with ETS but … NOTHING!


Viv Forbes is Chairman of the Carbon Sense Coalition in Australia.