It’s good to see that the Prime Minister is concerned that Australian bankers make bigger profits. This is from her speech to the Business Council of Australia:
In total around sixty per cent of the world’s GDP is either subject to a carbon price today, or has one legislated or planned for implementation in the two or three years ahead.
International carbon markets will cover billions of consumers this decade. Ask the bankers at your table whether they want Australia to clip that ticket. We’re going to help them get their share.
I’ve written previously about this artificial market. It’s one thing for bankers to create new products within existing markets that reduce transactions costs or better allow resources to flow to their most efficient use. But arguing for bankers to ‘clip that ticket’ for an artificial market is a form of corporate welfare – a non-transparent form but no less pernicious than the Government writing a cheque for tens of millions of dollars and sending it to the banks (or, probably by electronic transfer). At least the latter would appear as a budget expense.
The latest argument running in the US is the need for a carbon tax / ETS to help balance the budget. But if one really believes that a tax increase is warranted – usually that is a proposal by those who lack the courage to cut spending – than surely an efficient tax should be imposed? A carbon tax is like a tobacco tax – it is supposed to reduce the consumption of a bad (although there is no way that CO2 emissions can be considered a bad like tobacco). That’s it reason to exist – and gathering revenue is a secondary matter. It is not the most efficient way to raise revenue.
Bankers know enough about how to make money. They have been very successful in socialising their losses. But now they want an artificial market to supercharge the capitalisation of their gains.
I love banks and bankers. But I hate when they get in tight with government. They then compromise their integrity, and inevitably reduce their efficiency and take their eyes off the ball. Usually the shareholder does pretty badly, even if the management does pretty well. So the principal-agent problem is writ large when it becomes the principal – (agent + government) problem.
Hello Samuel, I think the term you are searching for which best describes the merger of government and cartel corporatism is “facism” – one of the faces of totalitarianism. Apparently facism doesn’t thrive in an enviroment of individual liberty and free market exchange, hence its full implementation requires many of said liberties to be removed, a process well underway around the globe and being advanced daily here in Australia by true believers everywhere, funnily enough many of them closet fabian socialists who have grown fat grazing on the rich fields of government largesse. Some old comment about “they will sell you the bullets to shoot them with” springs to mind, but I can’t remember who said it. Collectivism, facism and totalitarianism have been mislabelled as free market capitalism for far too long now, and the co-opting of the meaning of words is the first of many steps taken by the malicious to control and frame the narrative. Indeed, if we should hate banks when they get tight with government then we should have been hating them for a very long time, maybe since 1913.
Nothing like shafting us carbon chumps to line the pockets of them carbon shysters.
“Clip that ticket”…
Spoken like a true slush-fund setter-upperer…
60 per cent? The Climate Commission says 30 per cent.
Same as why Enron supported the Sulfur Dioxode Emission Schemes…
Milton, 60% or 30%, its all BS. If you asked the percent of “effective” carbon taxes/trading schemes it would be likely be ZERO.
I am sorry, when did pigouvian taxes cease to be efficient?
You are wrong about increased atmospheric concentration of CO2 not being a bad. It doesn’t matter that trees like CO2 and the other arguments presented for why CO2 is not a pollutant.
If you were serious “Nonsense” and not a misanthrope who loves declining prosperity, you’d be pro nuke.
Dot, that is a stranger argument than Samuel J’s.
Who said I was anti-nuclear?
I saw the doco on the sub-prime market and how the smart young bankers dreamt up the scheme with no idea about the outcome. This carbon tax nonsense is exactly the same sort of flummery.
It is why I treat M Turnbull with scepticism – Goldman Sachs ran with that bubble and will run with this one too.
Nonsense – I said that Pigovian taxes are inefficient in raising revenue. If you think Pigovian taxes are efficient revenue raisers, then why not eliminate income tax, GST and land tax and replace the lot with carbon taxes/tobacco taxes etc?
As for increased atmospheric concentrations of CO2 being a bad – that’s not necessarily true for the range of CO2 concentrations being discussed. Current CO2 concentrations are around 395ppm – I don’t think that increasing it to 1000ppm would make much difference to the climate, but would promote the growth of plants and improve living conditions on the earth. That is, it is arguable whether atmospheric concentrations of say 300 – 1000 ppm are a good or a bad. If the former, one would have a Pigovian subsidy.
Obviously for much higher levels of CO2 (or much lower levels of CO2) it would be disastrous. At the extreme, it we had the concentration of CO2 in the atmosphere as on Venus (about 965000 ppm) then life as we know it wouldn’t exist.
Business as normal would lead to atmospheric CO2 of up to 550 – 600 ppm which I think is well within the safe range.
But my point – if you read it properly – was that a Pigovian tax is inefficient at raising revenue.