Greens carbon tax
I see that the Greens have announced a carbon tax to replace the emissions trading scheme (with details and analysis by BERL here). The authors of TVHE have long been a fan of this type of switch when discussing the issue (eg here and here). And the idea of pricing an externality and using it to lower other tax burdens is a good one. Note: John Small also discusses here, with specific discussion about dairy. Aaron Schiff discusses here.
So it should be unsurprising that I broadly agree with the aim Green party policy here, and this should be kept in mind while reading my post.
However, TVHE isn’t about saying what policies I think are good or bad – it is about considering trade-offs and thinking about the details of policy when we can. In that context, there are a few points I must raise.