Politicians on both ends of Pennsylvania Avenue are increasingly obsessed with the idea of a carbon tax. They should pay attention to the latest policy debacle in Australia.
A decade ago, Australians went all in on “green” energy policies. Sydney enacted a carbon tax that was supposed to save the planet from rising oceans, with no negative effects on the economy. Earlier this year, Australia did a 180-degree turn and repealed the tax, citing lost jobs and higher production costs.
Prime Minister Tony Abbott admitted over the weekend that the policy was a disaster for family incomes. “Repeal of the carbon tax means a $550-a-year benefit for the average family,” he estimated.
An administration spokesman also declared what seems obvious: “Getting rid of the carbon tax meant that household electricity bills have been reduced; it makes us more internationally competitive.”
Abbott infuriated liberals by pointing out that women will be big winners from canceling the carbon tax because “women are particularly focused on the family budget.”
The carbon tax also proved to be highly regressive, hitting poor families much harder than the wealthy.
Australia had hoped that de-carbonizing its economy would lead to a cascade of new investment and green jobs.
It never happened. Instead, in the wake of the shale oil and gas revolution, and falling prices for fossil fuels, the economic viability of wind and solar power has crashed and burned in Australia.
Germany, France, Spain and most other European nations have learned this same lesson the hard way. As Germany’s economic minister put it last year, the transition to “renewable energy” has priced many German manufacturing products out of the international market and has been a job killer.
But as the rest of the world abandons unworkable green energy policies, they’re still the rage among liberals here.