Monday, November 29, 2010

Carbon V Dollar

There's a lot of talk recently about a carbon price. Obviously, it helps the economy in the long run. But some are scared that in the short term a carbon price might damage the economy. So, a recent economic report compared it to a 20% increase in the Australian dollar (like we've just had).

It found the exchange rate to have the same effect as an $85/tonne carbon price. A suggested carbon price is $23/tonne, and the CPRS would have started at $10/tonne.

If the economy can withstand the equivalent of an $85 price, I'm sure it can manage a $10-23 price, for the sake of the long term good.

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