What nobody wants to say about the carbon tax package

by Richard Denniss and Andrew Macintosh in Crikey
Originally published in Crikey on July 10, 2012

Over the past 12 months, the political debate over whether the carbon price is a tax or an emissions trading scheme has been as brutal as it has been boring. Rather than explain the details of what is, in fact, a hybrid scheme, the government, opposition and media have instead busied themselves in the politics of broken promises, minority government and the inherent conflict between the need to compromise and the need to stand on principle. In a couple of years, when the political hysteria dies down, it will be necessary to analyse the actual policy that has been passed in order to either (depending on your faith in science and economics) make it better or tear it down. And when that day comes, most people will probably be quite surprised at what they find. Put politely, the clean energy future package contains a surprising number of contradictory mechanisms and objectives which, in time, will need to be streamlined and reconciled. Before detailing seven of its major contradictions, it is important to state at the outset that, while the government’s package has a number of deficiencies, it is better to have a price on pollution than not. The measures that have been established should be seen as a starting point and, irrespective of who wins the next election, they will evolve through time. Our interest in identifying these contradictions is not to suggest that the clean energy future package is not worth having; merely that it will need an overhaul if it is to be cost-effective.

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