Those who spruik the benefits of emissions trading should be transparent about questions of how anticipated carbon prices over the next decade will transform our energy sector.
On October 23, the Age reported that increased alcohol prices are driving many young people to switch to the party drug ecstasy, according to drug researchers, nightclub owners and young people themselves.
“It is cheaper and convenient to use pills”, said Professor Jake Najman, director of the University of Queensland’s Alcohol and Drug Research and Education Centre. “A lot of young people are making that choice to switch between alcohol and ecstasy. Pills can be cheaper, there is no question.”
If you are wondering what the hell ecstasy has to do with climate change policy, the answer is simple: the case highlights the unintended consequences of pricing-based policy and the substitution effect.
The verdict is still out on the extent to which the Labor government’s “alcopops” tax rises are responsible, but we can safely assume that policymakers did not intend to encourage ecstasy use.
Despite the obvious differences between public health and climate change, the occurrence raises an interesting question about carbon pricing, as the government’s new Climate Change Committee begins its work. Is there a risk that carbon prices could encourage a shift to undesirable energy substitutes?
ClimateWorks Australia’s March 2010 Low Carbon Growth Plan for Australia says: “The power or electricity generation sector is Australia’s single largest sector for direct