ConsumerismEconomicsGlobal Warming/Climate Change

Cigarettes Up by Another Five Dollars

Consistency of Policy required

The Federal Government of Australia is increasing the excise on cigarettes by 60% over four years, by just over $5. This is aimed at reducing government (i.e. taxpayer) costs for treating smokers’ illnesses. The government obviously sees this as justifiable, as well as politically safe. Their goal is to reduce smoking in the population, but they plan on deriving substantial revenue (about $5b) in the meantime.

Last week on Lateline, Dr. Peter Hope said that detailed analysis by his group at Cambridge University showed that the cost of ameliorating carbon pollution was $100 per tonne, and suggested that such a fee should increase markedly each year, to achieve the required result as quickly as possible.

This statement by Dr. Hope has the same logic as the cigarette pricing policy outlined above.

If the government was to be consistent, it would not abandon a fixed price for carbon pollution, but instead, increase the carbon fee to the level that would actually reduce carbon dioxide emissions, and, as it has done with the globally less significant issue of cigarette smoking, keep increasing the carbon fee to achieve the objective.

What is the required objective? McKibben and many others point out that to have any hope of achieving no more than a two degree increase in global average temperature, 80% of current carbon reserves have to stay in the ground.

James Hansen argues that the only way to make this very effective strategy politically acceptable is to ensure carbon fees received are paid directly to the population, not indirectly, by pension increases or tax deductions. As well, all of the fees received are paid out, with no provisions for research, or compensation (as per Labour), or direct action (as per Liberals).
Let the people use their share of the Carbon Dividend to switch to energy saving technologies that are most appropriate for their situation, or, at least, to defray increased costs caused by the fee.

The first political party that proposed such a clear and effective “Carbon Fee and Dividend” policy would surely gain a huge increase in their vote. The evidence for this is clear. There is a large groundswell of respectable middle class community activist organisations demanding just such a policy around the world, and the momentum is high across all age groups.

But such a policy would be a sign of serious statesmanship…. Don’t hold your breath, particularly if you’re a smoker!


  1. We keep saying lower CO2. Why? plant life needs 400pp min to grow. We are below that level now. Also it has been proven by NASA. that we need a higher level of CO2. As it reflects UV rays. As for the government increasing the levy on cigarettes. When the cost of medical costs are higher than the revenue raised they will ban smoking. Regards, Barry.

  2. If the government was truly serious about reducing global warming, they’d eliminate taxes and excises on cigarettes. Cigarettes assist in culling one of the most destructive pathogens on the planet, what’s not to like about them?

  3. Barry, Plants do not NEED 400ppm to grow. It is only in the last few months that the world’s CO2 level has got to 400ppm for the first time in many millennia. Growers can force particular plants to grow faster by increasing CO2 to 1000 ppm, but it is NOT sustainable as a generality – weeds would outcompete edible species.

    Please share your evidence for your statement that “NASA has proved that we need a higher level of CO2 because it reflects UV rays.” It is generally accepted that excessive CO2 stops UV re-radiating to space, and so altering earth’s energy balance.

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