Kyoto – A Perspective (Part 5)

Posted on Thu 04/03/2008 by

4


EMISSIONS TRADING AND CARBON TAX.

Note the subtle change in the sub heading, from carbon footprint to carbon tax.
In the previous piece I mentioned the psychology aspect in distracting you from the real point, and how I mentioned that the same applies for the bigger picture.
The small picture is the small extra payment on the airline ticket to offset that carbon element of your flight, and how you feel better knowing you have made the flight carbon neutral, even though the environment was actually harmed by that flight.

There was an article recently in our Australian media, and to show I’m not making it up, I’ll include the link.
This article mentioned that there could be a huge windfall for the government if an emissions trading scheme was introduced, and whatever you do, don’t refer to it as a new tax, but refer to it as something bland and ‘nice’ sounding, something acceptable.
One thing that interests me in a wry sort of manner is that with a flourish, our Prime Minister signs off on Kyoto, and then 17 weeks later (and it’s always later) the huge implications regarding the potential cost reach the surface.

http://www.abc.net.au/news/stories/2008/03/20/2194865.htm

Incidentally, this report is from the ABC, which in this case, stands for Australian Broadcasting Corporation. It has no allegiance with or relationship to the US ABC network, and in fact the Australian ABC is actually 10 years older than the US ABC, an offshoot of NBC. Our ABC is the national broadcasting network, and is non commercial. (See how you guys are learning about Australia along the way. We’re more like you than any other nation on the Planet, although Australians might fiercely disagree.)
Later, some of you might like to read the comments from readers to get some idea of the feedback, but the article is included to show that Emissions Trading could be worth up to $20Billion. That works out to $1,000 for every man woman and child in Australia, per year.
Extrapolated out to US figures, that works out close to $300Billion, but the figure is approximately the same at $1,000 per person, exchange rates being relatively similar. So that works out for that average Pennsylvania family that I introduced as an example in the previous piece of husband, wife, and 2 children around $4,000 per year or close to an extra $80.00 out of the weekly household budget.

Okay, there’s the monetary implications, and it’s a fairly simple thing to just write them down like that.
What does it really mean?

Think back to what I mentioned about the psychology aspect.
You’re not going to seriously change the way you live. You’ll tinker at the edges by maybe changing you light bulbs from the old incandescent to the new Fluorescent ones, at a premium cost up to eight times the cost of those old bulbs for a prospective saving of maybe one percent off your electricity bill. You may even switch electrical items off at the wall, and not leave them on standby. You won’t however do without heating, air conditioning, refrigeration, washing machines, dryers, TV’s, Computers and on the list goes. You might even participate once a year in Earth Hour, but all this is just what I said. Tinkering around the edges, because those big use items are staples of everyday life.

Three things might conceivably happen.
Fact. The government will impose that carbon tax, (sorry, emissions trading levy) on the power companies, and remember, I mentioned that coal fired power plants are the biggest contributors towards greenhouse gas production, and as all power is connected to the grid, you can’t differentiate coal fired power from any other, and I’ll explain that later also.

Result 1. The company says it won’t pay so the Government says then that we’ll shut you down. Disaster for the Government because people will seek to blame only one entity, and that will be the government, because they will be perceived as the ogre. This way the consumer loses that portion of electrical power from the grid and other plants find it difficult to take up the slack, putting immense strain on the system, resulting in brownouts at peak times in the coldest of winters and the hottest of summers and at breakfast and evening meal times, because the system cannot cope.
Result 2. The Company pays but the Government says that the Company cannot pass the cost on the consumers. The Company has difficulty absorbing the cost. The shareholders see their profits being eaten into and dump the stock. The bottom falls out of the Company and it fails. See Result one for what happens next.

Result 3. The most likely result. The company pays, and then passes on the impost of $1000 per person onto the consumer. The consumer needs electricity as a staple of life and has no option but to pay, but as I said their lifestyle will change only minimally. They will still consume approximately the same amount of electricity.

The psychology aspect. The government has to sell this last option, as unpalatable as it is. They go with this possible story.
You have to pay for what you are doing to the environment. The money is being used to make that environment cleaner for everyone.
In reality the money could be used to plant trees somewhere to make the electricity use carbon neutral, but in reality, someone somewhere other than in the US will be doing without electricity.
People will (possibly grudgingly) pay the amount but will be happy in the knowledge that they are actually doing something in support of the environment.

But here’s the big picture. All those thousands upon thousands of coal fired power plants will still be belching out greenhouse gases to produce the same amount of electricity. The environment is still being harmed exactly as it alway had been before the tax (sorry, emissions trading) was introduced.
Nothing has changed. You’ve just been fleeced more for it now, but at least you feel safe in the knowledge that you’re doing something for the environment.
It’s not about the environment. It’s not about the psychology. It’s just about the money.

Next. I’m going to show you some things about the production of electricity, but you’ll need to hold your heads up, because your dropping jaw might break a rib or two.

Go back and click on the link and read the comments. Some people are so deliciously uninformed, it’s almost comedic. The bland reaction is that this is something that we will wake up to one morning next week, and hey presto, all will be fixed. Sometimes the hair on the back of your neck just prickles up.

KPPSTony