Consumption tax modelling

A carbon tax is more economically and environmentally sound than a cap-and trade system such as the CPRS (carbon pollution reduction scheme), according to modelling released by CEDA (the Committee for Economic Development of Australia).

The modelling, based on the same Treasury framework as earlier models, was commissioned by CEDA from Access Economics.

The modelling is available by following the link below.

"Preliminary economic modelling of a national consumption-based approach to greenhouse gas emissions".

Geoff Carmody in his chapter in CEDA's latest report A Taxing Debate: Climate policy beyond Copenhagen labels the Australia's Carbon Pollution Reduction Scheme (CPRS) 'the GST from hell' claiming it will affect exports, exempt imports and reduce competitiveness. He argues that it is more likely to drive emissions (and jobs) overseas than reduce emissions globally. Consumption-based emissions policy: A vaccine for the CPRS 'trade flu'? questions the proposed policy model as an acceptable international solution and notes that, China supports a consumption-based approach.

Geoff Carmody presented preliminary results and discussed the benefit a tax at a recent CEDA event. His speech is available in various formats by clicking the links below.

• Listen to an audio recording of Geoff Carmody's speech. [3375KB MP3]
• View Geoff Carmody's presentation. [982KB PDF]
• Read a transcript of Geoff Carmody's speech. [57KB PDF]