Is The Carbon Tax Effective?

Now that we’re into the fourth month of the carbon tax, there are a couple of questions that need to be answered.

First of all, is the carbon tax seeing an increase in the cost of living? Second, is the carbon tax even going to be effective in reducing carbon emissions in Australia?

We can answer the first question with definitive “Yes.” In a recent poll by Essential Report, they asked 1043 people whether or not they had noticed an increase to the cost of living since the carbon tax was introduced. 69% of those polled noted they had certainly seen an increase.

So is this cost worth it? Will the carbon tax be effective? While it’s too early to say for Australia, the signs from other countries that use carbon taxes emissions quotas to try and reduce emissions (such as Europe) show that while emissions have seen a reduction, they’re not exactly substantial.

Is there a better alternative to the carbon tax?

There is actually, and it’s something that the United States have been doing instead of the implementation of carbon tax. Rather than tax companies and households, the US has spent money investing in new technologies to help reduce the cost of using new, low carbon sources of electricity – thus making new energy sources more appealing for US citizens.

So what’s the result? Well, first of all, the US’s carbon emission levels have decreased dramatically to those of Europe. In fact, carbon dioxide emissions in the US have dropped to the country’s lowest level in 20 years.

In the first five months of 2012 alone, the country’s expected CO2 emissions declined more than 800 million tons from their 2007 emission peak. That’s a drop of 14%. Given that their reduction in emissions has been so significant, does it mean the Australian government has invested in the wrong strategy? Potentially.

What is known is the fact that the carbon tax is not popular here in Australia. Businesses and individuals are noting increased costs of living while, in the meantime, we’re still waiting to see the environmental payoff. But why impose a tax that has shown to be less effective in other countries while countries that embrace new technologies are seeing far more dramatic carbon emission reductions?

Aren’t new forms of energy the way to go? We can’t simply impose a tax on carbon emissions and fossil fuels and ignore the fact that what will actually fight global warming is cleaner, renewable forms of energy.

Perhaps the carbon tax will see significant reductions for Australia, but if the history of other countries with similar systems is anything to go by, it doesn’t look that promising.

What are your thoughts? Do you think we should be investing more in new technologies than taxing businesses and individuals? Share your thoughts in the comments below.

* Image source: mapichai / FreeDigitalPhotos.net