Do the maths, Tony. John Quiggin crunches the numbers on carbon taxes

CPD fellow John Quiggin took a closer look at the Coalition’s claims about carbon taxes on his blog on 2 August 2010.

“Unimpressed as I am by Labor Julia Gillard’s Prime Ministership, they (and she) remain far preferable to the alternative. For an illustration of what’s on offer, let’s look at Tony Abbott’s claim (repated on quite a number of occasions) that a $40/tonne carbon tax willdouble the price of electricity. For coal-fired electricity, CO2 emissions are around 1 tonne/MWh for black coal (a tonne of coal generates about 2.5 tonnes of CO2, and also about 2.5 MWh of electricity), and a little more for brown coal. So, a $40/tonne tax implies an additional cost of 4c/kwh. Electricity prices vary a lot, but currently the standard retail rate in Queensland is around 20c/kWh, so the price increase would be around 20 per cent for households. Businesses that use large amounts of electricity pay lower prices and would therefore face a higher price increase, but since the generator cost of electricity is typically more than $40/MWh, no one paying a market-determined price would face a doubling.”

Read the whole post here.

Leave a Comment