More cost of living woes for parking and leccy

arescarti42 said :

chewy14 said :

But with no compensation the price signal is also there and is in fact stronger than with the compensation. The compensation reduces it’s effectiveness because they have more disposable money.

Why not just make the tax so high that no one can afford to consume anything? Everyone would die and no CO2 would be produced at all, which would make the tax extremely effective.

Compensating people results in an outcome that is consistent with the government’s target to reduce CO2 by 5% on 2000 levels by 2020.

Or we could, you know, make the people who are consuming the carbon actually pay for their usage? Get people to actually do their bit to combat climate change.

Nah, let’s make those “rich” people pay for it, that’ll learn ’em.

chewy14 said :

But with no compensation the price signal is also there and is in fact stronger than with the compensation. The compensation reduces it’s effectiveness because they have more disposable money.

Why not just make the tax so high that no one can afford to consume anything? Everyone would die and no CO2 would be produced at all, which would make the tax extremely effective.

Compensating people results in an outcome that is consistent with the government’s target to reduce CO2 by 5% on 2000 levels by 2020.

johnboy said :

Fallacious thinking.

After receiving compensation the punter is still faced with choices as to how to spend their available resources and the carbon intensive choices are more expensive than the less carbon intensive.

So the pricing signal survives the compensation.

Now whether any of this matters when the chinese and indians are commissioning masses of new coal stations is a totally different argument.

But with no compensation the price signal is also there and is in fact stronger than with the compensation. The compensation reduces it’s effectiveness because they have more disposable money.

As well as this, you’re assuming that the price signal will be effective when elasticity of demand for things like water and electricity have been shown to be generally weak particularly during more extreme weather (hot or cold).

Because without compensation, a price on carbon is a regressive tax, which worsens as the price of carbon is raised.

I don’t quite understand how the tax is a vote buyer—support for it seems evenly split, and it continues to be very contentious.

chewy14 said :

Not even close.
If the stated purpose of the carbon tax is to reduce GHG emissions then compensation only serves to defeat that purpose.
The only reason they would add the compensation is to try and buy votes (or not lose them) from “working families” whilst increasing taxes for those who already pay the most tax.

Sheilding people from the effects of their carbon use does nothing to enact change.

Fallacious thinking.

After receiving compensation the punter is still faced with choices as to how to spend their available resources and the carbon intensive choices are more expensive than the less carbon intensive.

So the pricing signal survives the compensation.

Now whether any of this matters when the chinese and indians are commissioning masses of new coal stations is a totally different argument.

arescarti42 said :

Erm, I hope the reason you’re thinking of is so that the living standard of most people is not as greatly affected by reducing our GHG emissions.

Because that is it.

Not even close.
If the stated purpose of the carbon tax is to reduce GHG emissions then compensation only serves to defeat that purpose.
The only reason they would add the compensation is to try and buy votes (or not lose them) from “working families” whilst increasing taxes for those who already pay the most tax.

Sheilding people from the effects of their carbon use does nothing to enact change.

*Sarcasm alert* Truly heartbreaking, that the average family of 6 or 7 will have to think about downsizing to only one two plasma screen tvs, three computers, four mobile phones and a few Gameboys to cut their electricity bills. Obviously smaller households can squander vast amounts of electricity as well – in this technological age having loads of electricity-guzzling appliances is seen as ‘normal’. ‘Wants’ have been confused with ‘needs’.

No household ‘needs’ giant tvs, multiple computers, huge home entertainment systems or a mega fridge with an LED screen in it. If you choose to have all that, then you shouldn’t expect to be subsidised for it. A lot of these families also rake in childcare subsidies, FTB A and /or FTB B, baby bonus etc. Hey Zed – single people without kids pay bills too!

chewy14 said :

Yes and if you don’t compensate people the effect of the tax will be even greater because people will have to make smarter decisions with what they purchase.

The compensation makes the tax less effective and I can only think of one reason they would do that and it has nothing to do with lowering peoples carbon footprint.

Erm, I hope the reason you’re thinking of is so that the living standard of most people is not as greatly affected by reducing our GHG emissions.

Because that is it.

arescarti42 said :

chewy14 said :

So what do you think about the compensation under the Carbon tax scheme?

I think if we’re going to have a Carbon tax (although I still think it’s a bad idea) there should be minimal compensation. The whole point is to reduce usage, so why give compensation at all.

The compensation will simply mean that most families don’t change their behaviour at all.

The effect of putting a tax on carbon and then compensating people for it seems to be widely misunderstood by most people (probably understandably).

Pricing carbon works by increasing the relative price of carbon intensive goods. What it means is that even if you fully compensate people so they can consume exactly the same way as they did before the tax, they will still consume fewer carbon intensive goods as the relative price of these goods is higher.

As for tax payer subsidising of large families, I fail to see why everyone else should have to share the burden from people who choose to have big families. Most people are smart enough to figure out that children are expensive, which is why the total fertility rate in Australia is just under two.

Yes and if you don’t compensate people the effect of the tax will be even greater because people will have to make smarter decisions with what they purchase.

The compensation makes the tax less effective and I can only think of one reason they would do that and it has nothing to do with lowering peoples carbon footprint.

chewy14 said :

So what do you think about the compensation under the Carbon tax scheme?

I think if we’re going to have a Carbon tax (although I still think it’s a bad idea) there should be minimal compensation. The whole point is to reduce usage, so why give compensation at all.

The compensation will simply mean that most families don’t change their behaviour at all.

The effect of putting a tax on carbon and then compensating people for it seems to be widely misunderstood by most people (probably understandably).

Pricing carbon works by increasing the relative price of carbon intensive goods. What it means is that even if you fully compensate people so they can consume exactly the same way as they did before the tax, they will still consume fewer carbon intensive goods as the relative price of these goods is higher.

As for tax payer subsidising of large families, I fail to see why everyone else should have to share the burden from people who choose to have big families. Most people are smart enough to figure out that children are expensive, which is why the total fertility rate in Australia is just under two.