Comments on: The Price of Carbon for Petrol

By: Rudd, Carbon and the Price of Petrol | Stubborn Mule

Rudd, Carbon and the Price of Petrol | Stubborn Mule — Wed, 06 Jan 2010 03:09:16 +0000

[...] impact modelling, a price of $25 per tonne has been assumed. In an earlier post I calculated the impact of the price of carbon on the price of petrol. Here are the results for a range of carbon [...]

By: stubbornmule

stubbornmule — Wed, 18 Nov 2009 23:01:38 +0000

Daniel: I can see the headlines now: “Taxing the very air we breathe!”.

By: Daniel

Daniel — Wed, 18 Nov 2009 17:38:08 +0000

Due to the fact that the 2.4kgCO2 per litre of petrol is largely comprised of free oxygen, perhaps a tax on the amount of oxygen sequested from the atmosphere would be a more simpler notion to pass onto the ill informed community for taxing emissions.

By: stubbornmule

stubbornmule — Mon, 14 Jul 2008 23:04:46 +0000

I've been syndicated over on the ANZ section of The Oil Drum.

By: stubbornmule

stubbornmule — Thu, 03 Jul 2008 05:01:11 +0000

@Mark: Fair point: I really should have said something like “the two most widely discussed approaches”. Certainly these are the approaches that most economists would favour, but perhaps that’s because they don’t really understand marketing. After all, homo economicus should not really be influenced by marketing, so it shouldn’t exist. But it does! Maybe I should re-read “Predictably Irrational” as there is plenty of material there to suggest other non-classical ways of influencing behaviour.

By: Mark L

Mark L — Thu, 03 Jul 2008 04:20:28 +0000

> the two main approaches to addressing this failure
> are taxation and “cap and trade” schemes

Well… the two main free-market-oriented approaches anyway, which are the only kind of approaches considered mentionable in this day and age. One can also, among other things, (i) subsidise development or use of alternatives (which we are doing), (ii) use marketing to influence behaviour non-economically (which won’t alone be effective enough in this case, and would turn Rudd into a hypocrite after the Workchoices advertising stoush), and (iii) regulate directly to either ration or restrict. Note: Use of conjunction here is intentional.

By: stubbornmule

stubbornmule — Wed, 02 Jul 2008 05:18:03 +0000

@Michael Michael: the emoticon was a side-effect and will be corrected!

By: Michael Michael

Michael Michael — Wed, 02 Jul 2008 05:00:28 +0000

Nice response – although I hope to good god that that emoticon was an unhappy accident to do with some manner of colon and a stray parenthesis. In honour of @Mark’s midrashing, too, surely it should be called a 90.48kg-hat-and-trade scheme, no?

By: stubbornmule

stubbornmule — Wed, 02 Jul 2008 04:36:24 +0000

@Michael Michael: there is no reason that the Government cannot generate revenue from a cap and trade scheme. It depends on how the credit as allocated. If they are simply given to existing emitters (known as "grandfathering") there is no revenue for the Government. However, the other approach is to auction the credits, which does generate revenue. If prices subsequently increase in the secondary market, the Government doesn't benefit from that but the next time there is an auction the Government would be likely to see higher prices. What the Government does with the revenue is another question. Swan has indicated that all revenue would be used to provide assistance to affected households and industries. Depending on how this is done, it could defeat the whole purpose of the scheme! Also, with all the sensitivity to petrol prices, the Government is looking like they may back out of passing all the costs onto fuel.

By: Mark

Mark — Wed, 02 Jul 2008 04:16:24 +0000

I was going to correct you michael michael, but I note 90.84 kg-of-carbon-dioxide hats doesn’t have the same ring to [their blackberries], no?