On July 1, 2012 the Australian government enacted a $23 (Australian dollars) per ton tax on greenhouse gases on a CO2 equivalent basis. This tax rose to $24.15/ton on July 1, 2013. At the behest of the Institute of Energy Research, Dr. Alex Robson, an economics professor from Griffith University in Brisbane, Australia, has written an instructive new study with lessons for U.S. and other policymakers.
The results were not surprising. As I’ve argued across a number of publications, carbon taxes are bound to inhibit growth, costs jobs, the taxpayers and have a negative effect on government revenue. A carbon tax may, overtime if it is high enough, make a country carbon neutral, but only at the expense of impoverishing the nation that enacts it.
The numbers from Australia bear out my arguments. Among the study’s findings:
· In the year after Australia’s carbon tax was introduced, household electricity prices rose 15%, including the biggest quarterly increase on record.
· Currently 19% of the typical household’s electricity bill is due to Australia’s carbon tax and other “green” programs such as a renewable energy mandate.
· Before the carbon tax, Australia’s unemployment had held steady, fluctuating between 620,000 and 640,000, but since July 2012 the number of unemployed workers in Australia has risen by more than 10 per cent, from 636,564 to 705,421, with the unemployment rate rising from 5.2 per cent to 5.7 per cent over the same period.
· A negative fiscal impact of more than $4 billion in 2015.
· Ironically, carbon emissions spiked after the cap was put in place and are higher now that any time in history.
And the numbers just get worse in future years.
This report is worth reading in full, especially for anyone who thinks a carbon tax is a viable approach dealing with the risks posed by carbon dioxide emissions.