Tuesday, October 20, 2009

Ken Henry on tax reform

If the tax structure from early last century prevailed today, we would have to raise $40 billion from excise and $230 billion from tariffs to meet today's revenue demand. At that rate the excise on a schooner of beer would be around 7 times what it is today. And I shudder to think how much a television set would cost.

That's Treasury head Ken Henry, speaking on lessons from past tax reform experience. Henry is chairing the review of Australia's tax system and he singles out road pricing to address congestion as a perfect candidate for reform:
When vehicles drive on a congested road they impose costs on other drivers. Each driver thinks of their own need to get to their destination, not considering how, by taking up space on the road, they impinge on the ability of other drivers to do so. There is no means for one driver to coordinate with others, to bargain about who should have priority, so that they can all be better off. This results in a predictable 'tragedy of the commons' which is estimated to waste around $9 billion a year in avoidable congestion costs, increasing to around $20 billion by 2020. Such costs will only increase with faster population and economic growth.

Worth a read.

6 comments:

Hari Batti said...

Interesting post; glad I stumbled on you.

As for your previous question re: how we feel about climate change: more and more I think it will be a disaster. Living in India, I see a system already pushed to the limit in human terms; then we get droughts and floods and generally failing monsoons due to climate change, and people start dying. It's already happening.

I understand Australia has a fairly sensitive ecology. I'd love it if we come up with cold fusion or some easy way out of the energy thing, but I don't think we should bet our future on it!

Take care. Maybe I'll see you around.

Hari Batti

Anders said...

I am also interested in environmental economics and am working in the non-profit sector in the San Francisco area. I run an environmental-news blog that highlights important environmental-economic news.

Check it out at: www.andersnews.blogspot.com

SAAW International said...

In the run up to the Copenhagen climate change conference, it is vital the following information be disseminated to the public as well as to our political leaders.

A widely cited 2006 report by the United Nations Food and Agriculture Organization, Livestock's Long Shadow, estimates that 18 percent of annual worldwide greenhouse gas (GHG) emissions are attributable to livestock….however recent analysis by Goodland and Anhang co-authors of "Livestock and Climate Change" in the latest issue of World Watch magazine found that livestock and their byproducts actually account for at least 32.6 billion tons of carbon dioxide per year, or 51 percent of annual worldwide GHG emissions!

www.51percent.org

The main sources of GHGs from animal agriculture are: (1) Deforestation of the rainforests to grow feed for livestock. (2) Methane from manure waste. – Methane is 72 times more potent as a global warming gas than CO2 (3) Refrigeration and transport of meat around the world. (4) Raising, processing and slaughtering of the animal.

Meat production also uses a massive amount of water and other resources which would be better used to feed the world’s hungry and provide water to those in need.

Based on their research, Goodland and Anhang conclude that replacing livestock products with soy-based and other alternatives would be the best strategy for reversing climate change. They say "This approach would have far more rapid effects on GHG emissions and their atmospheric concentrations-and thus on the rate the climate is warming-than actions to replace fossil fuels with renewable energy."

The fact is that we are being informed of the dangerous path we are on by depending greatly on animal flesh for human consumption. We still have the opportunity to make the most effective steps in saving ourselves and this planet. By simply choosing a plant based diet we can reduce our carbon foot print by a huge amount.

We are gambling with our lives and with those of our future generations to come. It's madness to know we are fully aware of the possible consequences but yet are failing to act.

Promoting a plant based diet to the public is would be the most effective way to curb deforestation, we hope this will be adopted as a significant measure to save the rainforests and protect the delicate ecology.

Thank you for your consideration.

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