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Truth about ETS and carbon tax

Comments on Henry Ergas “Treasury should know better about an ETS”, 8/04/2011, http://www.theaustralian.com.au/national-affairs/commentary/treasury-should-know-better-about-an-ets/story-e6frgd0x-1226035611467

Good point, Ergas.

Maybe another way to put it more clearly would be that either the government, not Treasury can't honestly and truthfully tell how much the costs of energy would be for consumers under an ETS to achieve the 5% reduction in emissions.

Further and arguably, ETS won't be able to tell exactly whether a target of reduction in percentage terms is achievable or not, given the fact that surely certain sectors or activities will be excluded or not included in the ETS as the original one indicated. That ETS can only tell the parts that are included and that is only a partial as opposed to a full account emissions in the target reduction.

So, it is good politics to hide the costs and not to tell the public about hit pocket costs (leave that to the market, that is their argument of course).

But that is not transparent and honest politics with the public, nor will that provide any certainty to business in terms of investment decision, because the future price of carbon is unknown even though on any day the ETS market may give you a current price.

Any argument of business certainty was, is and will be fanciful thinking and self delusion.

It is good politics too clever by half.

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