Carbon tax cuts will cost environment

Household subsidies and imposed regulation within the “Clean Energy Futures” scheme will reduce the effectiveness of carbon pricing and cost the environment in the long run.

A University of Melbourne study has found that the contentious scheme may not be as effective as initially thought, and that household assistance would unnecessarily increase the cost of a carbon pricing mechanism.

However, Professor Peter Lloyd suggests that despite the costs of subsidisation, the scheme is still a better alternative to not taking action at all.

“The carbon price even with the tax cut alters the relative prices of more or less emission-intensive goods and services,” said Professor Lloyd.

Read more at University of Melbourne