I stumbled upon this piece and voted in this online poll. I said I wasn’t making any changes to my behaviour as a result of the carbon tax. But most people are! So far so good!
I stumbled upon this piece and voted in this online poll. I said I wasn’t making any changes to my behaviour as a result of the carbon tax. But most people are! So far so good!
That is encouraging, Nicholas. One of the mistaken ideas is that people do not react to price signals and as most people are being compensated there will be no environmental effcts. This suggests otherwise.
It would surprise me if people didn’t react to price signals. It would also surprise me if smart economists automatically thought the reactions were necessarily a change for the better.
I reacted by buying solar panels. Origin will give me money for the surplus power and the initial price is being subsidised by other electricity customers. Do you think that is a good thing?
the politics we have seen about this issue are really a disgrace for us all.
hummm….leadership seems such a dated and now disregarded concept but I also encounter people telling me that education isn’t the answer to every question!
Agree with you Pedro about the solar panels.I thought the solar schemes are really an example of poor planning and/or implementation.
Then again my neighbour thinks his bill is such that a suitable number of panels will cost a sum that will be recovered very promptly.
Was the combination of features of cheaper production and rising prices for electricity not the outcome the scheme wanted? I appreciate that a major component of the electricity price rises is distribution investment related.Such schemes of control need to go too!
Pedro,
You write “Origin will give me money for the surplus power and the initial price is being subsidised by other electricity customers. Do you think that is a good thing?”
Well it’s a good thing and a bad thing. The cross subsidies are a bad thing and trying to do something about what could turn out to be anything from a non-event to a mortal threat to our species is a good thing. In the balance I think the latter outweighs the former.
More generally if you look at societies tackling things, they often do it in ways that economists can spot as dumb. Chinese, Japanese, Korean, Taiwanese industry policies are a case in point. They’re messy and wasteful but they were done with a goal in mind and generally – for all the waste – worked. This isn’t (by the way) an endorsement of imitating them here, or even an endorsement of them now.
But if a job’s worth doing, and you have to do it through the messy machinery of government, then I guess it has to be messy. Perhaps a better example is our social security system, which is as messy as they get, but perhaps better than anyone else’s (if you think targeting is a good thing and you trust Peter Whiteford’s work.)
Another example is Sydney’s tollways. Stupid way to build the roads, but if the alternative was not building them, then they’re a Godsend.
But doing good things in dumb ways? Well it’s not to my taste, but beggars can’t be choosers. What do you think?
So Nicholas, are we agreed that responses to price signals are not necessarily a good thing if the response is itself a decrease in efficiency? No need for us to rehash whether my solar panels (or even everyone’s) appear likely to save the barrier reef. I see from the govt’s table that the $9 for the carbon tax is dwarfed by the renewables contribution to the electricity price. So this price signal has encouraged me to contribute to increased prices for people who can’t afford the panels.
Pedro I thought most of the increase (in NSW at least) was down to ‘gold plating’. We have greatly reduced our consumption and each time we have the fixed supply cost has risen
BTW
I do not know if it is true, but a engineer living out of town claims that disconnecting from the grid and running your own diesel generator would be cheaper .
Yep I’ve changed my behaviour since the carbon tax.
I spend all my time prowling through price lists from suppliers, so I know how much to raise my own prices, or which services to drop entirely.
Some of the bigger suppliers, despite burning the midnight oil, have not yet provided a new price list. Hmm…..
Of course people react to price signals. In South Australia water consumption dropped by 60Glitres last year as people cut their wastage, installed tanks and became more efficient. The privately owned water company wasn’t happy!
In other states the publicly owned water companies had the good sense to ensure that any other options are outlawed… so they always stay happy :-)