Carbon tax failures – lessons from Australia and Germany

In a national election yesterday, frustrated Australians threw out the administration that imposed a carbon tax on the country.

An article in the Daily Caller notes that the carbon tax did not decrease carbon dioxide emissions.  One year “after the tax was enacted electricity prices had risen 15 percent, including the biggest quarterly price increase in the country’s history. Furthermore, 19 percent of the typical Australian household’s electricity bill is due to the tax and other “green” programs in the country. Taxing carbon may have also impacted the job market, as unemployment shot up by 10 percent after its implementation.”

The Daily Caller article notes some other consequences of the carbon tax: a record 10,632 businesses faced insolvency in 2012; and provincial hospitals forked over an extra $6.1 million for energy costs in only six months.

A report from the Institute for Energy Research said the carbon tax failed to deliver any of its promised benefits.  The IER report also says that the “carbon tax will permanently reduce GDP below what it otherwise would have been in every year that it is in place, with these costs growing over time.”  The study notes that there has been a reduction in real wages and predicts that electricity costs will double by 2050.

Germany, the greenest of the green in Europe, is suffering the consequences of its foolish energy policy of carbon taxation and heavily subsidizing alternative energy schemes.  The German paper Spiegel Online has a long article titled “Germany’s Energy Poverty: How Electricity Became a Luxury Good” with the subtitle “Germany’s aggressive and reckless expansion of wind and solar power has come with a hefty price tag for consumers, and the costs often fall disproportionately on the poor.”

Even though Germans already pay the highest electricity prices in Europe, the government predicts that electricity bills will increase an additional 20 percent due to renewable energy surcharges.  “After the Fukushima nuclear accident in Japan two and a half years ago, [German Chancellor] Merkel quickly decided to begin phasing out nuclear power and lead the country into the age of wind and solar.”  The result was that “German consumers will be forced to pay €20 billion ($26 billion) for electricity from solar, wind and biogas plants — electricity with a market price of just over €3 billion. Even the figure of €20 billion is disputable if you include all the unintended costs and collateral damage associated with the project. Solar panels and wind turbines at times generate huge amounts of electricity, and sometimes none at all. Depending on the weather and the time of day, the country can face absurd states of energy surplus or deficit.”

The increased electricity costs have resulted in power shut offs in more than 300,000 households a year because of unpaid bills.  “It is only gradually becoming apparent how the renewable energy subsidies redistribute money from the poor to the more affluent.”  “Germany’s renewable energy policy is particularly unfair with respect to the economy. About 2,300 businesses have managed to largely exempt themselves from the green energy surcharge by claiming, often with little justification, that they face tough international competition.”  Where have we heard about “waivers” before?  Could it be Obamacare?

“More and more wind turbines are turning in Germany, and solar panels are basking in the sun, yet the amount of pollutants and greenhouse gases emitted by smokestacks increased last year.”

We see that in both Australia and Germany, the green dream is a costly mistake that fails in its primary goal of reducing carbon dioxide emissions, puts a damper on the economy, makes things more expensive, and cuts jobs.  It’s not easy being green.

See also:

Study says subsidies and tax incentives for renewable energy have minimal effect on greenhouse gas emissions

The economic impact of Arizona’s renewable energy mandate

Petition to Arizona legislature – Dump Renewable Energy Mandates

Does alternative energy actually replace fossil fuel consumption?


  1. Great news out of Australia today; thanks, Jonathan, for reporting it. Most Citizen bloggers don’t read widely enough.

  2. I keep saying that one day, electricity will be a symbol of the Rich; the poor will not be able to afford electricity and will return to the Middle Ages.

  3. “It is only gradually becoming apparent how the renewable energy subsidies redistribute money from the poor to the more affluent.” Translation….get connected to the ruling elites, ignore the facts, or bend over.

  4. Liza, what is your physical evidence that shows our carbon dioxide emissions have a significant effect of global temperature? Can you cite any? Apparently the IPCC can’t because they haven’t.

    The most probable problem with climate change that will adversely affect us is return to another glacial epoch.

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