Sunday 6 July 2008

Garnaut idiocy

I heard a snippet of Garnaut on the radio today.

He said, if you have a carbon tax of $10 a tonne, the govt will raise $4 billion in revenue.

If you have a tax of $20 a tonne, they will raise $8 billion.

Um, sorry to break it to you BONEHEAD, but the whole idea of these sin taxes is to reduce consumption. Therefore, as the rate of tax goes up, consumption drops. I can't believe this idiot has written a report based on an economic model that assumes that revenue will double as the tax rate doubles. If doubling the tax rate doubles the amount of income raised, it means that the tax has had absolutely no impact on consumption, making it utterly worthless as a green tax - but quite good as far as raising revenue is concerned.

Success would be saying that doubling the tax rate to $20 a tonne increases the tax take, but only to say $6 billion, meaning that consumption has dropped as the rate has increased.

If he doesn't understand that simple point, then the whole report is a waste of space.

1 comment:

kae said...

Either Garnault is a bonehead.

Or he knows that people can not reduce their consumption of the GHG producing necessity of life.

(He believes in AGW, sitting on the fence, he's not sure of the science... I vote bonehead.)