Carbon taxes are only effective on goods or services with elastic demand where less/no carbon alternatives exist.
If there are no alternatives, or demand is inelastic, the producer is able to pass all costs on to the consumer. The consumer is over a barrel, and the producer continues to make as much profit as before. This does not disinsentivise production, nor does it facilitate a reduction in demand in any but the most extreme scenarios.
So, no, it was not working as intended, which is why it was dropped.
I’m not convinced there are many goods like that. Lower carbon alternatives exist for most consumer products. But the data also does show that Australian co2 emissions dropped when they had a carbon tax and went back up when they got rid of it. I imagine the right wing Abbot government had more reasons for getting rid of it than just being ineffective.
Carbon taxes are only effective on goods or services with elastic demand where less/no carbon alternatives exist.
If there are no alternatives, or demand is inelastic, the producer is able to pass all costs on to the consumer. The consumer is over a barrel, and the producer continues to make as much profit as before. This does not disinsentivise production, nor does it facilitate a reduction in demand in any but the most extreme scenarios.
So, no, it was not working as intended, which is why it was dropped.
I’m not convinced there are many goods like that. Lower carbon alternatives exist for most consumer products. But the data also does show that Australian co2 emissions dropped when they had a carbon tax and went back up when they got rid of it. I imagine the right wing Abbot government had more reasons for getting rid of it than just being ineffective.
That’s definitely part of it, sure.