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Some Dude - that's it from me. All been discussed. Not being drawn in any further into nitpicking and splitting hairs. Goodnight.
The information is there to demonstrate that the difference has been understood and stated well before the election. What hasn't been discussed is why you reject them. Simply stating that it is splitting hairs does not make it so when Julia, Tony, and the legislation demonstrate a difference.
The Conversation said:The proposed carbon pricing policy in Australia is now routinely referred to as a "carbon tax" by both government and opposition. This is odd, because the proposed scheme is not actually a tax.
How does an ETS work?
It seems reasonably likely that Australia will, sooner or later, end up with an emissions trading scheme (ETS) for CO2. An ETS works by setting a cap on emissions and requiring emitters to hold a permit for each tonne of CO2 that they emit. The level of the cap determines the number of permits available. If emitters don’t already hold a permit, they must either cut back on their emissions or buy a permit from another emitter, who must then cut back. This means that a cost is imposed on emissions, equal to the price of buying or selling a permit. But importantly it’s not actually the price that causes the overall cuts in emissions. The cap determines the level of emissions, and the required cuts in emissions cause the price. That is, permits have a value because they allow you to avoid making cuts in emissions.
How does this differ from a carbon tax?
A carbon tax is sort of the opposite. A cost is added to all emissions, equal to the level of the tax, and this causes people to cut back. There is no cap on emissions in a tax-based system. People are free to emit as much or as little as they like, but if they do emit, they must pay the tax. Unlike an ETS, under a carbon tax it is the price that determines the level of emissions.
The Conversation said:Where is Australia in all this?
The system the Australian government is currently proposing to move to in the medium term is a standard ETS, not a carbon tax. But in the short term, there is a twist. The proposal is to fix the price of permits for the first few years, presumably to reduce uncertainty during the transition period after the scheme commences. It would still be an ETS, with a cap on emissions and permits that can be traded, but the price of permits would be fixed by the government. There is a similarity between the fixed-price ETS approach and a carbon tax. If the fixed price is set at a high enough level, then it would be that price, rather than the cap, that determines the level of emissions. At that high carbon price, people would actually emit less than the maximum level set by the cap. In that case, the ETS would be behaving somewhat like a tax.
But there are still important differences.
In the government’s proposed scheme, permits could still be traded among emitters and potential emitters, even in the period when there is a fixed price. That does not occur under a carbon-tax regime.