The “Carbon Tax” Is NOT A Tax … It Is The Bankers’ CPRS By Another Name

27 Jun

Apologies in advance for any underlying tone of anger / frustration here.

I’ve decided to post on this topic after yet again fruitlessly debating with someone – a prominent conservative public “think tank” figure who should know better – who (like most Aussies) has swallowed the line that our government is introducing a carbon dioxide “tax”.

It is not. Ok?

It is NOT a #&^%! “tax”.

It is something far more insidious than merely a simple “tax” … something that you are hoping could easily be repealed one day.

But hey, don’t take my word for it.

Here’s Julian Turecek of Cleantech Ventures, writing for MacroBusiness in May 2011 (emphasis added):

The current government has not yet give its policy a formal name. So the Opposition has obliged* and chosen one for them: a carbon tax.

Now this has got a lot of people, mainly tax advisers and accountants, barking up the wrong tree. It’s not actually a tax…

The current proposal is not a tax, but a fixed price emissions trading scheme. This is exactly the same as the CPRS, which also had a fixed price at the start.

[* Think back carefully. When Gillard announced that she would introduce a “price on carbon” after all, she and the government initially denied the Opposition’s “great big new tax” claim. But they have since allowed, and encouraged, this false meme to become entrenched into the public psyche. I believe that is because calling it a “tax” sounds more simple and less threatening, and does not so clearly highlight the banker-driven “trading” aspect if they had instead called it what it is, and always was ultimately intended to be right from the beginning … an Emissions Trading Scheme.]

Do you need something more formal and “official” than the word of an investment fund manager for “clean energy” technology?

Then read the final Garnaut Review, Chapter 5 (emphasis added):

In implementing an emissions trading scheme with a fixed-price start, there are two sets of decisions to be made: the starting price and how much the price will rise in each subsequent year; and the timing, conditions and manner of transition to emissions trading with a price that is set by market exchange.

Garnaut makes it crystal clear. It is an emissions trading scheme with a fixed price start.

Need more?

Carefully read the government’s own website on the topic (emphasis added):

Broad architecture of the carbon price mechanism

A carbon price mechanism could commence with a fixed price (through the issuance of fixed price units within an emissions trading scheme) before converting to a cap-and-trade emissions trading scheme…

Now sit up and take notice.  The following is very important, if you are going to get your head around why this is NOT a tax, and why allowing it be called that in public discourse (but not in the official documents) is a very sneaky, very deceitful way of relabelling what is exactly the same policy.

Note carefully what it says under Transition Arrangements (emphasis added):

Transition Arrangements

At the end of the fixed price period, the clear intent would be that the scheme convert to a flexible price cap-and-trade emissions trading scheme. In relation to the transition to a flexible price, it would be important to design the arrangements so as to promote business certainty and a smooth transition from the fixed to flexible price.

Ross Garnaut also reiterates the importance of the initial design promoting a “smooth transition” to a fully-floating price ETS, in his final Garnaut Review:

Investors need clarity about when and the conditions under which the transition to a floating price will occur. To support a smooth transition, the necessary institutions and supporting infrastructure should be established from the beginning of the scheme. It is important to specify rules for the scheme as soon as possible, including arrangements for auctioning permits and for acceptance of offsets and international permits.

Ok.

So, how exactly do you design a scheme to promote a “smooth transition”?

By giving those initial “fixed price” permits an expiry date that is far enough away to ensure that they can be traded when the emissions trading scheme transitions to a “floating” price. In this way, the “property rights” of those forced to purchase the initial “fixed” (and rising over “3-5 years”) price permits are safeguarded (ie, thus, “business certainty”) – they can “bank” their permits and trade them later, when the transition to a floating price occurs.

Of course, an even simpler way would be to give these permits to “pollute” an unlimited expiry date.

Which is exactly what the government’s official Policy position was under the original Rudd-Garnaut CPRS White Paper.  Which the Gillard-Garnaut “carbon pricing” mechanism aims to replicate – because that is what the bankers want (emphasis added):

Policy position 8.1

Each permit will have a unique identification number and will be marked with the first year in which it can validly be surrendered (its ‘vintage’). It will not have an expiry date.

8.4.1 Banking

Banking allows permits to be saved for use in future years. With unlimited banking, permits would not have an expiry date—once issued, they could be used for compliance at any future time.

… the advantages of banking are greatest if banking is continuous. For these reasons, the Government will allow unlimited banking from Scheme commencement.

To all those who continue to parrot the party line that what our government is proposing is a “tax” … you are wrong.

You have been hoodwinked.

In calling it a “tax”, you are focussing on unimportant details of the initial “fixed price” period, and failing to see the end game. The Big Picture.

The Government’s plan has never changed.  They have always been pursuing a CPRS – an emissions trading scheme – with an initial fixed price period.

It’s the thin end of the carbon-trading global banksters’ wedge.

So if you still think it is just a “tax”, then you have just bent over, grabbed your ankles, and taken the thin end right up your @$$.

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15 Responses to “The “Carbon Tax” Is NOT A Tax … It Is The Bankers’ CPRS By Another Name”

  1. JMD June 27, 2011 at 5:26 pm #

    I already laid some shit on Julian over at MacroBusiness.com, they do get a bit touchy about criticism though.

  2. Fascistlefty June 27, 2011 at 5:30 pm #

    Yay! someone on the right finally gets it 🙂

    • The Blissful Ignoramus June 27, 2011 at 5:46 pm #

      Just FWIW, I personally reject the label of being on the “Right”. My views entirely depend on the particular merits/demerits of the individual policy. I can and do vehemently agree … and disagree … with policies from both so-called “sides” of politics.

      The L-R paradigm is a manufactured con to polarise society, and keep those interested in politics impotently bluing amongst themselves.

      • Fascistlefty June 27, 2011 at 8:56 pm #

        well said.

  3. Fred June 27, 2011 at 10:42 pm #

    How about we coin some new names for it:

    -The carbon cash cow
    -The bankers balance-sheet buttress
    -The goldman goose
    -The Swan swindle
    -Julia’s Albatross
    -The black pudding (instead of the magic pudding, with a remarkably similar plot) http://en.wikipedia.org/wiki/Magic_Pudding

    Where’s a good word-smith or scrabble player when you need one!

    • The Blissful Ignoramus June 27, 2011 at 10:59 pm #

      Good thinking Fred. Might just have to find some time to come up with a few myself 😉

  4. Tomorrow's Serfdom June 28, 2011 at 6:42 pm #

    Malcolm “a market based mechanism to price carbon” Turnbull, being the devout “environmentalist” he is, (cough) should take a quick trip back to NY to visit his bosses, and stay there….. forever. And while he’s at it, take his Trilateral Commission mates, Garnaut, Hewson and Harris, with him. Hewson, as just another “economic advisor” under Sir Harold, was only ever good enough to be a bag carrier for his then boss, Sir Harold.(his words, not mine). And Garnaut, (JAFA), who the hell is is, anyway???
    How about this… why don’t the lot of them, pollys, banksters, and their economic “think tank” ex-bankster mates take a hike off the nearest 400 ft cliff, and leave the rest of us alone……..Sorry guys, I get a little worked up over all this crap….

  5. Fred June 28, 2011 at 8:55 pm #

    BI, I disagree, not so well said. The art of rhetoric requires that a side in debate do not show they are flustered or worked up. Better to keep a cool head and ooze confidence, or at least give the impression. Do take the piss, make it witty, maintain a kind of sportsmanship and avoid descending into ‘desperate play’; swearing, abusing, etc. It shows the other side they are winning, or at least hold some high moral ground. I appreciate your blog, and from what I have seen; you think well, write well, go-hard yet fair. Some of the reader comments though, I wonder if they could be more helpful at times.

  6. Tomorrow's Serf June 30, 2011 at 8:26 am #

    Ok Fred,

    I take your point and in future, wit, sportsmanship, fair-play and high rhetoric protocol will be guiding principles.

    However……….. one can’t help feeling a growing sense of desperation at the apparent inevitability of the fate being prepared for “we the people”, despite our obviously overwhelming unwillingness to be herded in the direction of economic “serfdom” by a cabal of well-meaning, greenly naive pressure groups, suspect, self serving politicians, an obviously compromised and corrupted,(and mostly govt. funded) scientific community and steering the whole consortium, our beloved banking sector, supported by various economic institutes, committees and think-tanks

    As I said, I get a little excited on occasion……..but better to get excited now rather than resigned to our fate later..

    • The Blissful Ignoramus June 30, 2011 at 9:55 am #

      Saw a very interesting sight this morning.

      A sign. Placed high in a tree. On a quiet country back road.

      GREEKS REVOLT
      AUSSIES SOON!

      My intuition tells me that the “Average Aussie” is nearing a tipping point.

  7. Tomorrows Serf June 30, 2011 at 10:04 am #

    It’s about time!

  8. William J July 8, 2011 at 5:58 am #

    Carbon tax or what ever name it goes by is simply a grab for money by the useless Gillard government as they have no ideas on how to “make money” other than by taxing Australia.

    I’m no greenie and just like nearly everyone else, I know that nothing us humans do will make a change to the environment, but I would support the following;

    1) A government that introduces a “CLEAN AIR TAX” by implementing the purchase and planting of Australian native trees throughout commonwealth owned land. I would only support this if it was carried out by commonwealth employees and not sub-contracted.

    The above would not only provide income to the government when hardwood trees are harvested, but as trees do suck in carbon/co2 it would clean the air and store carbon as intended by nature – IN TREES, not in bloody tax credits and offsets !.

    The above is a long term project that only a government could carry out as the harvest cycle for hardwood trees is approx. 40-60 years

  9. Fred July 11, 2011 at 11:21 pm #

    Tomorrrow’s Serf, I hope to one day refer to you (and perhaps others who feel similarly) as Tommorrow’s knight with lap-tops; I have for you my friend, the legislation busters weapon of choice. We call it the: http://www.coag.gov.au/ministerial_councils/docs/COAG_best_practice_guide_2007.pdf

    With it you may: identify logical weaknesses, with precision, maim, damage & possibly even destroy illegitimate reasons to regulate.

    I’m not saying you can’t string an argument together, but they expect most, even big business, to come into legislation debates like little children with their verbal pop-guns and paper and crayon sabres and fingers in navels, wasting rhetorical ammo and energy, hitting every thing else but the targets they’d need to hit. The rabble & squabblers are ‘listened to’ like ignorant whining children, some of the really annoying ones, or those with rich dads, get a party favor to shut them up, but most, can be, and are routinely ignored for the stuff that matters. The legislation generals watch & listen & learn and push their way past.

    So, go out, find some upcoming legislation that’s going to enrich a few and screw your world, get in early – and coherently attack it early with these tools.

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