The Only 2 Carbon Tax Questions That Matter

About Latest Posts Bruce JacksonBruce co-founded The Motley Fool UK in 1997. Now back in his native Australia, Bruce is …

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The Motley Fool has an important announcement.

Normal stock market service will be resumed from tomorrow. We'll be discussing Warren Buffett's big call on the U.S economy, falling house prices and their connection with consumer confidence, Chinese inflation and whether Australia can win the Rugby World Cup.

But today we couldn't resist one last (we promise) comment on the carbon tax.

For the average Aussie in the street, the whole carbon debate boils down to two questions…

1. Will it reduce carbon emissions?

2. What does it mean to me?

The first question has a simple answer. Yes, putting a price on carbon will reduce emissions.

I'm no scientist, but closing dirty, brown coal burning power stations and replacing them with cleaner sources of energy has to reduce emissions.

Putting a price on carbon has to incentivise business to invest in cleaner energy sources.

None of this is going to happen overnight. It's going to take decades for us to wean ourselves off our carbon addition. But doing nothing is not an option.

Life is good

To answer the second question, you have to take a longer-term view than just wondering about how many dollars will end up in your next pay packet.

We've never had life so good. Australian's have especially never had it so good. We've had 20 years of uninterrupted economic growth. We have unemployment running at less than 5%. Our economy is the absolute envy of the world.

As a result, collectively we're living a comparative life of luxury.

We have cheap airline travel.

We have air conditioners in every bedroom of our massive suburban houses.

Each and every person over the age of 17 or 18 has their own car.

You get the picture. It's a good life.

Compare our standard of living to that of our parents, some of whom grew up in the depression. There is simply no comparison.

A better life

Don't get us wrong. We're all for progress, and a better life. But there has been a cost, and it's called climate change. Remember that debilitating decade-long drought we just endured? It was climate change in action.

Just like many stock market investors, we are influenced too much by the recent past, and when looking into the future, we can't see beyond the next couple of years.

The recent past had floods, not drought. Climate change hasn't been an obvious problem to date, so we assume it's never going to be a problem.

But climate change is real. It is irrefutable. Doing nothing is not an option, even here in little ol' Australia.

All jump off the bridge together

It's irrelevant that, on the world scale, our emissions are tiny. On a per capita basis, according to the OECD, Australia is the third largest polluter in the world. We should be embarrassed.

Of course, the planet needs other countries to do their bit too, including the U.S. and China. Their governments and citizens should also be embarrassed, hopefully embarrassed into action, and preferably soon.

Any parent tells their children that just because someone else is doing something wrong is no reason for you to copy them. Ignoring climate change just because others are is just wrong.

Give back

Things have to change. What it means for you is, starting next year, you have to give a little more.

Forget tax breaks – they are mostly about the politics. Putting a price on carbon forces us to give up a little of our pay packet today, in order for future generations to live in a cleaner planet.

It's a small price to pay.

Now…if we could all just move on, please?

Normal Motley Fool service will be resumed from tomorrow. We apologise for the interruption.

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