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CPI and I

12/07/2011

Not sure what all the fuss is about.

A lot of people are claiming the sky will fall in. The coal industry is one of them. Last night as we all slept, and after the announcement of the carbon price, this happened.

THE world’s biggest coalminer has boosted Julia Gillard’s efforts to sell her clean energy plan, signalling its confidence in the future of the industry under a carbon tax by launching a $4.7 billion takeover bid for Macarthur Coal.

Peabody Energy has teamed up with fellow Macarthur shareholder ArcelorMittal – the world’s biggest steelmaker – to bid $15.50 a share in the biggest takeover offer made for an Australian coalminer.

The bid came only a day after the government launched its carbon tax plan, which was attacked by coalminers for failing to provide sufficient industry assistance. Miners warned that the package would force marginal operations to close.

Of course the NOTW, sorry I mean THE AUSTRALIAN, opted to run the following headline:

Miner bets $5bn on future of Coal

Yes. That’s right. That is how business works. Lets take a gamble. Business is like playing the pokies apparently. What utter bullshit.

Business take risks, yes. They also do take gambles. But they make sure the odds are in their favour first. They forecast in 10, 20 year plans. And despite the carbon price, this company sees a profit in those forecasts.

Despite the carbon price.

Of the 500 big polluters, the majority are EXPORTERS!!!! That is any carbon price they incur, they can not pass on to us in the economy as we are not the consumers of their goods.

Petrol is exempt. That knocks out any flow on affects related to transport. That is the cost to freight goods are not affected by the carbon price.

What we are left with is a 0.7% rise in CPI. CPI by the way is the average rise in prices annually. Currently we set that at 3.2%. We have been disturbed by electricity prices of late as they have risen up to 16% annually. Over four times CPI.

The carbon price will have a 0.7% rise in CPI. That is 0.7% of 3.2%. This works out to a total increase of around about 0.045 in prices.

Where is Alan Jones where you need him. Zero point zero four five. Further the BULK of price rises go to the consumers of the exporters.

I just can not understand why such a small rise is an issue. People say they want to do something about the planet but refuse to put their money where their mouth is.

If you do not want to pay all of that 0.045% extra, then here is the thing. Buy low carbon emissions made goods. In fact, the consumer is what will drive this. People will make the switch form an energy supplier that is on 20% renewable to one that is 30% renewable and save 30%!

Of course not just us poor taxpayers have that choice. So do the 500 polluters. Remember them? The can cut part of their carbon price bills by simply changing electricity supplier!

Or even better, by supplementing that supply with initiatives to reduce costs again. Those in the steel and coal industry use vast amounts of water. You see the stacks of steam rising in all those shots. Now if they were to pipe the steam to a generator instead of release it, it can spin turbine generators.

And yes. It can work in reality

http://www1.eere.energy.gov/industry/bestpractices/pdfs/betsteel.pdf

Or you can just keep paying the extra. Choice is yours.

A.Ghebranious  2011 (All Rights Reserved)

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4 Comments
  1. Jennifer Baratta permalink

    Some people never learn

  2. Geoff permalink

    Pretty sure that the 0.7% rise is total rise. Still not much but from say 3.0 to 3.7%. However that is a one off rise. It doesn’t keep increasing each year except for maybe when the ETS kicks in.

    • No Its actually .7% of cpi. As I said .045 200 / .045 = 9. And I believe the increase in prices of a $200 basket is …. $8 dollars

  3. Geoff permalink

    80 cents not $8 dollars?

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