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7 comments

Australian Carbon Tax Burdens ACR Costs

Posted July 18, 2012 10:00 AM by larhere

On July 1, 2012 The Australian Government introduced a "Tax on Carbon". The tax covers the majority of the economy with few exceptions.

The price established by the government is $A23/ton. This price is fixed with a 5% increase each year for the first three years and then the tax will convert to an emissions trading scheme.

The global warming effect of synthetic greenhouse gases is being addressed by imposing an "Equivalent Carbon Price" to synthetic greenhouse gases. This means that importers of synthetic greenhouse gases, including importers of equipment containing these gases will be liable to pay the equivalent carbon price (tax).

To arrive at the value of the tax the importer multiplies the $A23/ton by the Global warming potential of the gas. Thus, for R404A the tax will be $A75/kg.

There are two points that make this tax a large burden on the air conditioning and refrigeration industries and their customers.

  1. The tax is applied at the point of import - like an import duty - and thus becomes a cost of doing business with each step in the commerce chain adding their appropriate margins.
  2. The tax is anywhere from 3 to 8 times the actual imported values of the refrigerant.

A Simple Example

With no tax-

Cost at point of import $1.00 leads to a selling price to the end user of say $3.00.

With a carbon Tax -

Cost of the product $1.00 plus a tax of say $4.00 = Cost to the importer of $5.00. Apply the same margins and the selling price to the end user is now $15.00

The objective of the tax is to encourage better maintenance, thus lower leak rates and to encourage the transition to low global warming potential refrigerants.

Both of these objectives are appropriate but there are some pitfalls:

  • There will be more on the jobsite recycling of refrigerants on existing equipment and if this is not done properly there may be issues with the equipment's performance and reliability. For example if the refrigerant is a blend such as R410A it is very difficult o ensure the recycled refrigerant has the same characteristics as new R410A. Further, refrigerant could be contaminated and the process of recycling on the jobsite may not do a suitable job in cleaning up the refrigerant.
  • There is more potential for organizations marketing alternative refrigerants e.g. Hydrocarbon refrigerants to convince people to replace their fluorocarbon with a hydrocarbon. Because equipment is designed to operate on a particular refrigerant this approach will lead to less than optimum performance and because hydrocarbon refrigerants are flammable the potential for serious accidents is increased.
  • For new installations this tax will encourage a move to lower GWP refrigerants. As always the decision on the refrigerant will be influenced by the investment strategy of the purchaser, which should take into account issues such as first cost, safety and overall system efficiency.

Editor's Note: CR4 would like to thank Greg Groppenbacher of GEA Consulting for contributing this blog entry.

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Guru

Join Date: May 2007
Location: Geelong, Australia
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Good Answers: 54
#1

Re: Australian Carbon Tax Burdens ACR Costs

07/18/2012 10:52 PM

Last Australian national election both major parties had the same number of seats, so the slightly socialist LABOR party cuddled up to the tiny GREEN party and took power. The Carbon tax was the price of power.

It's hard to overstate how unpopular this tax is. It's come at a time when many Aust. businesses are hurting mainly due to the extremely high exchange rates. There has also been a huge amount of disinformation as everyone who has, is or wants to put up their prices blames the Carbon Tax.

Interestingly, all the money collected is given back to the public as tax cuts. So there's a choice: continue as before OR cut your energy use and pocket the difference. Unfortunately many people can't see how elegant this is.

Personally it doesn't hurt or help me much but I doubt it will do much good for the environment.

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Power-User

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#2
In reply to #1

Re: Australian Carbon Tax Burdens ACR Costs

07/19/2012 1:40 AM

The global warming carbon tax scheme is a total scam. I, like a lot of people, didn't give it much thought until the climate-gate scandal in which emails from Global Warming headquarters in Anglia, England were made public on the internet. There were clear references to past falsification and manipulation of data, ongoing falsification and manipulation, and discussions of what falsification and manipulation should take place next to "convince the public." After that, I started paying attention. I investigated many of their scientific claims, many of which simply defy logic, many are flat out erroneous, and most involve a lot of double-speak. A few tidbits to consider with with global warming proponents AGREE: the effect of co2 is logarithmic. The first 20 ppm has the most effect. By 280 ppm (100 ppm below present level), co2 is pretty much done as a greenhouse gas. Agreed upon is the fact that man's contribution to atmospheric co2 is 3% and nature's 97%. AGW proponents claim that co2 is 8% of "global warming." In reality, it is much, much less. But pretend they are right and do the math. 0.08 x 0.03 and convert to percentile. That's a pretty insignificant contribution. Variations in water vapor content (water vapor being THEE main greenhouse gas) positively swamps any effect co2 might have. Another thing the global warming proponents agree upon is that temperature increase comes first, then an increase in co2. This cycle has played out throughout history. Temperature increases first, then co2 increases. Through some convoluted logic that makes no sense to me, they turn this into co2 CAUSING temperatures to increase. I could go on at great length, but you get the general idea. This is just an excuse to tax the entire human race. It's been promoted by a part of the UN called the IPCC. They aren't scientists. The IPCC is a political body.

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Guru

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#3
In reply to #2

Re: Australian Carbon Tax Burdens ACR Costs

07/19/2012 2:17 AM

Hi Jerry

There are two parts to the GW debate; 1. What's happening & 2. What if anything should we do about it.

The first bit is pretty well settled, the vast majority of the experts, those actually in the business, think it's happening and the ongoing tests and measurements show it's happening.

I've read all the so called "Climate gate" emails and to me they look like typical "in house" discussions on how to rout opponents. Who hasn't said similar things when we think only our friend are listening.

The rest of your email advances a technical argument that raises the question "Why should I believe you before the experts"? I'm a skeptical sort of person with a background in science and some understanding of the actual warming mechanism and, while fully aware of my ignorance, the "warming" effect looks at least plausible.

The second part "What, if anything, should we do"? is based on value judgements and is therefore highly political. Plenty of room for arguments there.

As it won't affect me or my kids much i don't really care what the answer is.

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#4
In reply to #3

Re: Australian Carbon Tax Burdens ACR Costs

07/19/2012 3:22 AM

You're wrong, ffej. "CO2: The Greatest Scientific Scandal of Our Time by Zbigniew Jaworowski, M.D., Ph.D., D.Sc., March 2007: The data from shallow ice cores, such as those from Siple, Antarctica[5, 6], are widely used as a proof of man-made increase of CO2 content in the global atmosphere, notably by IPCC[7]. These data show a clear inverse correlation between the decreasing CO2 concentrations, and the load-pressure increasing with depth (Figure 1 A). The problem with Siple data (and with other shallow cores) is that the CO2 concentration found in pre-industrial ice from a depth of 68 meters (i.e. above the depth of clathrate formation) was "too high". This ice was deposited in 1890 AD, and the CO2 concentration was 328 ppmv, not about 290 ppmv, as needed by man-made warming hypothesis. The CO2 atmospheric concentration of about 328 ppmv was measured at Mauna Loa, Hawaii as later as in 1973[8], i.e. 83 years after the ice was deposited at Siple.

An ad hoc assumption, not supported by any factual evidence[3, 9], solved the problem: the average age of air was arbitrary decreed to be exactly 83 years younger than the ice in which it was trapped. The "corrected" ice data were then smoothly aligned with the Mauna Loa record

(Figure 1 B), and reproduced in countless publications as a famous "Siple curve". Only thirteen years later, in 1993, glaciologists attempted to prove experimentally the "age assumption"[10], but they failed[9]. You can read his entire paper. He is a climate expert. Or you can read the work of Ernst George Beck who used direct co2 measurements going back 200 years and also proved pretty much the same thing Jaworowski did. For even more entertainment, read what Dr. Theon (Hansen's supervisor at NASA) had to say about Hansen (of GISS). "We should have muzzled him." AND the additional 49 NASA scientists and astronauts who wrote a letter to NASA director denouncing Hansen and AGW, stating in closing that Hansen, with his falsified data and lack of transparency (among other things) was giving science, scientists, and NASA a "bad reputation." So, FFEJ, you don't have to take my word for it and anyone who wants to know the TRUTH of it can find it if they want to put in the time. Your thinly veiled condescension didn't have quite the effect on my self-esteem you had hoped for. My own academic accomplishments, I'm quite sure, exceed yours. Guru status notwithstanding

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Guru

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#6
In reply to #4

Re: Australian Carbon Tax Burdens ACR Costs

07/19/2012 10:18 PM

Hi Jerrys. I'll certainly check out the info you cite.

Although, like most people who don't actually work full time in the field, I have a problem putting the often obtuse academic arguments into context.

Interestingly, a quick web check on Dr. John S. Theon shows he retired from NASA in 1994, well before the current debate, was never Hansens direct supervisor and his GW position is a minority within NASA. Does this matter? I don't know, but it does show it's not possible to take every "expert" at face value.

As for condesension, I wasn't aware I was doing it and I certainly don't want to harm anyone's self esteem, I just want to get to the truth, even the TRUTH if it exists.

Qualifications? I've got a degree in Elec Engineering, what's yours? The CR4 Guru staus depends only upon the number of letters written, not their quality (luckily).

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#7
In reply to #6

Re: Australian Carbon Tax Burdens ACR Costs

07/20/2012 3:04 AM

Mechanical engineering, electronics and electric motors and generators, chemistry, thermodynamics and fluid power, mathematics up to calculus, physics, nuclear physics, principles of nuclear power plant operation, etc. A LITTLE bit more relevant to the discussion at hand.

Dr. Theon WAS over Hansen. Hansen was protected by his bud, Al Gore, and that is why he got away with breaking the rules and spouting off his mouth. Dr. Theon is hardly the only NASA scientist to profess skepticism in regards to global warming.

"As Chief of several of NASA Headquarters' programs (1982-94), an SES position, I was responsible for all weather and climate research in the entire agency, including the research work by James Hansen, Roy Spencer, Joanne Simpson, and several hundred other scientists at NASA field centers, in academia, and in the private sector who worked on climate research," Theon wrote. "I appreciate the opportunity to add my name to those who disagree that global warming is man made."

Theon takes aim at the models, and implicitly criticises Hansen for revising to the data set:

"My own belief concerning anthropogenic climate change is that the models do not realistically simulate the climate system because there are many very important sub-grid scale processes that the models either replicate poorly or completely omit. Furthermore, some scientists have manipulated the observed data to justify their model results. In doing so, they neither explain what they have modified in the observations, nor explain how they did it.

"They have resisted making their work transparent so that it can be replicated independently by other scientists. This is clearly contrary to how science should be done. Thus there is no rational justification for using climate model forecasts to determine public policy."

Hansen is in charge of the GISS data set, derived from readings published by NOAA. The GISS adjustment have received criticism (a potted summary here) for revising the historic record in an upward direction - and making undocumented and unexplained revisions.

Theon also takes issue with Hansen's claim that he was suppressed by NASA officialdom, and states that the science didn't support Hansen's increasingly apocalyptic warnings of an imminent thermageddon.

"Hansen was never muzzled even though he violated NASA's official agency position on climate forecasting (i.e., we did not know enough to forecast climate change or mankind's effect on it). Hansen thus embarrassed NASA by coming out with his claims of global warming in 1988 in his testimony before Congress."

Hansen has called for energy industry executives to be jailed for dissenting from the man-made warming hypothesis.

Roy Spencer, PhD, formerly of NASA: "Something about retirement apparently frees people up to say what they really believe. I retired early from NASA over seven years ago to have more freedom to speak my mind on global warming.

You might recall that after Dr. Joanne Simpson retired from NASA she (trmm.gsfc.nasa.gov/3rd_trmm_conf/simpson.doc) admitted to a long-held skepticism regarding the role of mankind in global warming.

And who can forget NASA's Administrator, Michael Griffin, admitting that he was skeptical of the urgency of the global warming problem? After the outrage that ensued, I suspect he wishes he had never brought it up.

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Guru
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#5

Re: Australian Carbon Tax Burdens ACR Costs

07/19/2012 10:59 AM

Anytime you give the government your money and then they decide how to give it back to you is never a good thing. This takes power away from the people and puts it in the hands of bureaucrats. Thomas Jefferson would be appalled.

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