The carbon tax figures are in: Australians paid $14b to reduce global emissions by 0.004%!

We can finally assess (sort of) the carbon tax in Australia. It ran for two years from July 2012 to July 2014 and cost Australians nearly $14 billion. The National Greenhouse Gas Inventory Office released Australian emissions statistics for the June Quarter of 2014. The headlines hitting the press this week are saying we reduced our emissions by 1.4%. The Greens are excited, but neither the journalists or the Greens have looked at the numbers. Not only is this reduction pathetically small on a global scale, but it’s smaller than the “noise” in the adjustments. Like most official statistics the emissions data gets adjusted year after year, and often by 1 – 2%. We won’t really know what our emissions were, or what the fall was, for years to come… (if ever).

Spot the effect of the Australian carbon tax in the graph of emissions by sector below. It operated for the last two years. The falls in electricity emissions started long before the carbon tax (and probably have more to do with the global financial crisis, a government unfriendly to small business, and the wild subsidies offered for solar power).

Did Australian industry “reduce” their emissions a year ahead of the carbon tax? Maybe. In anticipation of the pointless expense and increased sovereign risk, they may have shut down or moved overseas. Should we celebrate?

The cost-benefits of using a tax to change the weather

During the carbon tax period we “saved” something like 17Mt of CO2. That’s how much less we theoretically emitted compared to what we would have been produced if our emissions had stayed at the annual level they were at in June 2012 (subject to adjustment). Australia’s emissions are 1.5% of total human emissions, which are 4% of global emissions*. Those global emissions from all sources during the two years of the tax were roughly 416 Gt. Thus the carbon tax may have reduced global CO2 emissions by 0.004% and global temperatures by less.

The carbon tax is often framed as “revenue” or money raised, as if the government created some wealth. It should always be called a cost. And it’s not money from “polluters” — it’s money from Australians.

The carbon tax cost Australians $6.6 billion in 2012-2013 and cost $7.2 billion (projected) in 2013-14.

Over the two year period, that’s $13.8b for an average reduction of 0.004%.

for an average reduction of 0.004%. The carbon tax was projected to cost $7.6 billion in 2014-15 if it had not been repealed.

The story of shifting data

Despite the headlines of “record falls” in Australian emissions, the data keeps changing, and the fall was about the same size as the adjustments. Each quarter, the numbers may be revised by up to 2%. In four of the last six years the annual emissions were announced and then were later raised. In two years the original estimate was similar to the last.

In other words, any 1% change is mere noise (in so many ways). Some of the time the headlines will have announced a fall in emissions that later vanished with data revision.

According to the most recent Excel data statistics I can find (subject to change), over the two years of the carbon tax our emissions started at 555Mt, fell to 550Mt and fell again to 542 Mt. As you can see by reading across the rows, the emissions may be adjusted for years after the fact. Who knows what Australia’s emissions of 2014 will be listed as 10 years from now.

Table 1: Running adjustments

As reported in June Q reports

2008 2009 2010 2011 2012x 2013x 2014x Emissions in year to June 2008 544 551 549.5^ … 548.9 545.5 552.4 Emissions in year to June 2009 … 544 548 … 547.9 541.3 554.2 Emissions in year to June 2010 … … 548 548 545.4 540.1 548.3 Emissions in year to June 2011 … … … 546 551.2 541.2 552.8 Emissions in year to June 2012 … … … … 550.9 546.2 554.9 Emissions in year to June 2013 … … … … … 545.9 550.2 Emissions in year to June 2014 542.6

These figures don’t count land use changes and forestry.

2014x, 2013x and 2012x are the Excel figures released with their respective June Quarterly reports – these are original emissions, not adjusted for seasonal effects or weather normalized. The other figures are “preliminary estimates” (like the 2014 figure) and come from the summaries and overviews issued each year. If they are adjusted for the weather or seasonality, I couldn’t find the note telling us so.

The Greens Leader Christine Milne thinks this 1.4% fall in emissions is embarrassing for the Abbott government. She looks at this graph and sees “success”. Its just as likely the cause of any flattening in our emissions is due to the Labor Party and Greens, or simply the GFC.

Spot the difference Australia’s Carbon tax made. Anyone?

Other quarters may look different but for the June Quarter this is what “success” looks like:

Figures from the Dept of Environment.

Gareth Hutchins reports on the reductions in different sectors for the Age.

They show the electricity (minus 4 per cent), agriculture (minus 2.6 per cent), industrial processes (minus 1.3 per cent) and transport sectors (minus 0.4 per cent) all experienced declines in emissions this year.

Most emissions reductions came from electricity use.

Christine Milne gets excited over the noise:

Greens Leader Christine Milne has slammed the federal government for waiting until after the Lima Climate Change Conference to release the data, saying the figures show just how effective Australia’s carbon price was at bringing down pollution.

“This is the biggest ever drop recorded and the price made it happen,” Ms Milne told Fairfax Media.

Except it wasn’t the biggest drop – thank the GFC for that:

H/t to Tim Blair

REFERENCES

ENDNOTES

* Humans add about 8 Gt to the atmosphere annually. Plants, oceans and soils add 208Gt. We produce about 4% of global CO2 emissions.

^These figures was not in the Quarterly report but in the May 2010 Inventory for 2008 see volume 1. p XIII

** The arithmetic: Annual emissions for the year to June 2012 are estimated to be 554.9 Mt CO2-e. In 2012-13 that rose to 550.2 Mt CO2 e. In 2013-14 it fell to 542.6 Mt CO2-e3 (theoretically). In total over two years we produced 1092.8 Mt, instead of the 1109.8 Mt we would have produced if we stayed at the June 2012 annual level for two years. We saved 17Mt of CO2.

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