In these two earlier posts, I commented on the need for carbon compensation to be attached to energy bills. I focused on the political benefits of such an approach. But there is another, more important reason for compensating low-income households this way.
Rather than the monthly bills that we receive for many subscription / contract services we use, electricity bills arrive quarterly. This can cause significant price shock to low-income households with limited access to savings and credit.
The votes have been counted and the headline results are as predicted months ago. The only talking point of interest, at this stage, has been reflections on the Greens vote. Various commentators have called the Greens result a disappointment, given that they went into the election as favourites in Balmain and strong chances in Marrickville, and on current vote appear Labor appear to have held Marrickville and likely to hold Balmain (though it’s very close).
But was the Greens result really so disappointing? What were the positives for the progressive Left?
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Part one of this post criticised the assumptions behind the proposed model of household compensation under the Rudd Government’s CPRS. Part two, below, looks at an alternative approach.
Following the announcement by the Multi-party Committee on Climate Change that there would be a carbon price on 1 July 2012, there has been an increased amount of discussion about compensation. The Chairman of Leighton Holdings, for example, has been reported saying that a carbon tax should be introduced with no compensation, to business or households, “as it simply defeats the purpose of trying to drive behavioural change”.
This outcome appears unlikely, and it seems that households will at least be partly compensated. It is important to look at how this compensation might be delivered, as the various options will have different policy and political implications.