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It is something far more insidious than merely a simple “tax” … something that you are hoping could easily be repealed one day.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


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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