Carbon Tax on petrol, yet another great idea?

get-in.jpgThe New Zealand Government has once again raised the prospect of a Carbon Tax on Petrol, rated as 7 cents in the litre. The concept I gues is based on a user pays scenario, so the more you drive, the more carbon you burn. Given that in most parts of New Zealand our public transport systems are pretty substandard, it looks like most of us will pay the price.

They have talked for a long time about measuring exhaust emissions and setting levels below which you can’t pass your Warrant of Fitness tests, but that still hasn’t come in. Of course that doesn’t generate significant revenue and the NZ Government has just announced a significant budget deficit, not that these 2 things are in any way related. I’ve also noticed that many of the ‘greenies’ drive diesel cars that blow black smoke and are often covered with soot, as are many of the buses I follow on the motorways. I suspect that the black soot on the bus I saw recently covering an advertisement on the back of a bus which said “we are drivers too” is a carbon waste product.

Currently, according to Caltex NZ, 41.6% of the price we pay for petrol in NZ is tax, so why not just round it up to an even 50%? The story was good though and I was impressed with Caltex’s excellent suggestions on how to use less fuel, some of them are very good. I suspect though that most people will continue their normal lifestyle. It’s like the old story of putting a frog in a pot of warm water and bringing it to boil slowly. We still love our big cars and we want to enjoy the great outdoors which is why many of us love in New Zealand.

The thing that amazes me is that we are still so slow with introducing alternative fuel engines. Toyota and Honda have done very well with Hybrid engines and they can’t seem to get enough to meet demand. Maybe the government should do something to encourage these vehicles and lower the import taxes on them. It’s yet another example of why the things that are good for you cost so much more. Give businesses in the cities an incetive to buy Smart Cars, but of course we have a problem with renewable energy as well, especially after a long dry summer. But wait, what about solar power? This is another tangent, but I read a couple of years ago about people in the USA getting major rebates for installing solar energy in their homes, plus the ability to sell their surplus power into the grid. We have certainly had more than enough sun this year, well actually I wouldn’t mind if it lasted all year round, but the point is we aren’t harnessing it and we aren’t offering people an incentive to help with the cost of making it happen.

So, we continue to encourage the use of fossil fuels (yes I know we are starting to include small amounts of biofuel into the mix, but all that will do at this stage is allow the oil to last a little longer. We know oil is a finite resource and once we have run out and the Middle East has caved in, what then? My prediction based on current consumption is that fuel will become incredibally scarce, travel and tourism will become incredibly expensive and this could have a disastrous effect on economies like ours.

So lets see what happens. Petrol prices go up because of oil scarcity, whether through resource depletion or through wars and terrorism. Oil prices also go up because of carbon taxes as oil companies have to buy carbon credits to meet their obligations. Taxes go up because they are based on a percentage of the price, whether through excise, GST, carbon, road user and others. The cost of living goes up because this impacts on everything we do, all goods and services involve transport. Domestic tourism and entertainment will suffer as people decide it costs to much to go anywhere. We all become a nation of obese couch potatoes because it’s cheaper to sit at home to watch sport or cable TV instead of going out and getting some exercise.

One day it will be too prohibitive to go anywhere except for special occassions and we will we end up living virtual lives, never leaving our homes at all.

Actually I wouldn’t mind the carbon tax if it was used on R & D for alteratives, for incentives for people to develop and commercialise alternative fuels and engines to run on them. The whole concept of carbon taxes seems to be punitive instead of constructive. What happened to Kiwi innovation? We’re still patting ourselves on the backs for inventing number 8 fencing wire, Hamilton jets and bungee jumping. Let’s pay people for coming up with new renewable energy resources instead of punishing people for using the only resources they have available to them, there’s a novel idea? There might even be international carbon credits in it.