Here is Richard Denniss crapping on about the carbon tax:
And then there are the economic modellers who pretended that a small carbon price would wreck the economy and then stayed silent about the costs to local industry of the doubling of domestic gas prices caused by new investments in gas export facilities.
I wonder if he’s talking about Treasury?
The fact is the carbon tax was a dog of a policy.
According to Treasury modelling – yes, even Treasury’s modelling – the tax was going to damage the economy.
This policy alone was going to reduce gross national income per person by almost 5% compared to a business as usual scenario (remember at this time Treasury also thought we were on track to quickly reduce the economic costs of debt and deficit).
Then according to the modelling it wasn’t going to actually work. Here is whate we were meant to believe:
But let’s decompose that figure into the domestic abatement and international abatement and the target:
See? The domestic abatement line never hits the 2020 target even by 2050. The whole story revolved around so-called international abatement. Just to remind ourselves how that international abatement was to operate:
The modelling assumes an eventual shift to a lower cost coordinated international policy framework, recognising that this is ultimately in all countries’ best interests. By 2016, a more coordinated international policy regime allows countries to trade either bilaterally or through a common central market. As a result, a harmonised world carbon price emerges in 2016.
To sum up – the carbon tax was a dog of a policy and the damage it did and would have done, for no actual benefit, was large.