Judith McNeill

The Employment Effects of Sustainable Development Policies

As ecological economists we research passionately those issues that will give us a clearer understanding of the complex interaction between the economy and the environment. We believe this to be vital for implementing environmental policies that will have fewer unanticipated or irreversible side effects. However, this paper will argue that whilst we are absorbed in this task, we are tending to ignore some of the simpler political realities associated with attempts to implement sustainable development. When governments reduce access to a threatened natural resource such as groundwater or forests, those who do not share the ecological economist’s views, or those who simply have not stopped to think about it, see only the immediate impacts of the loss of jobs and reduced income multiplier effects in regions. Media reporting of only the most explosive aspects of issues exacerbates a loss of popular support for conservation measures. The debate surrounding the Tasmanian timber industry in the 2004 federal election in Australia provides a graphic example.

CALCULATING DEVELOPER CHARGES FOR URBAN INFRASTRUCTURE: A FEASIBLE METHOD FOR APPLYING MARGINAL COST PRICING

ABSTRACT This paper considers the application of marginal cost pricing to the calculation of developer charges, also termed exactions or impact fees, in the contemporary urban environment. We derive an “ideal” measure of long-run marginal capacity cost (MCC) of urban infrastructure expansion. Given practical difficulties in estimating MCC, we develop an alternative Adjusted Amortization Method (AAM) with less onerous data requirements. Using a simulation model we compare the magnitudes of developer charges derived from the ideal MCC measure, our AAM method and three other common approaches to the measurement of MCC. Our results show that an adjusted version of the AAM formula performs very well.

The Current Crisis In Neoclassical Economics and the Case for an Economic Analysis Based on Sustainable Development

This paper reflects on the current crisis that confronts neo-classical economics in the wake of declining enrolments in academic economics programmes around the world, the emergence of a popular ‘post-autistic’ economics network following the revolt of economics students at a number of leading universities and, most importantly, the apparent inability of the neoclassical paradigm to bridge the gap between theory and reality. There is a saying that ‘the more things change, the more they stay the same’, but in this paper, the authors contend that the economics profession is now on the brink of a scientific revolution, or what Thomas Kuhn referred to as a ‘paradigm shift’. As Herman Daly has observed, if the theory is not good enough, the real world does not stop to wait. Governments everywhere (and international organisations such as the OECD) are engaged in a big effort to develop indicators that focus on the sustainability of industrial activities. Meanwhile, businesses are waking up to the fact that without careful attention to sustainability issues, they face considerable insurance risks. The paper employs the concepts developed by Thomas Kuhn to assist in the analysis of the current crisis. In the process, it assesses the readiness of national and international political economies to embrace sustainable development and reject neoclassical economics. The paper critically examines, and roundly rejects, key postulates of the theory offered by neoclassical economists to support their arguments that production and consumption can be sustained forever and that the natural environment is not an important constraint on growth. The authors conclude that the theoretical work of ecological economics and its counterpart in the business world, ‘natural capitalism’ is a far more sensible paradigm for business.

HOUSEHOLD DISTRIBUTIONAL AND REVENUE RECYCLING EFFECTS OF THE CARBON PRICE IN AUSTRALIA

The Australian Government introduced a carbon tax from 1 July 2012. The then opposition party leader, now Prime Minister, introduced legislation to repeal the tax. Amongst the many issues being debated is that of the incidence of the tax. In this study, we explore household consumption and income changes arising from a A

From Throughput to Access Fees: The Future of Network and Retail Tariffs

23 carbon price employing a computable general equilibrium model (entitled A3E-G). The model has been calibrated using a social accounting matrix database of Australia with 10 household income groups. This carbon price generates A

A CGE assessment of the Australian carbon tax policy

6.39 billion revenue while reducing Australias carbon emissions by 11%. The empirical evidence suggests household level impacts range from proportional to mildly progressive tax incidence. In this study, we propose four revenue recycling options to overcome any undesirable distributional effects from the carbon price. Results indicate that revenue recycling through income tax reductions and uniform lump sum transfers improves post tax income levels and welfare towards middle and high income groups. A nonuniform lump sum transferring option favors low income households. Uniform reductions in commodity tax rates are not found to be welfare improving but we find positive impacts on export competitiveness from this option.

A note on the use of developer charges in Australian local government

This chapter critically evaluates how utilities will need to adjust their tariff structures to compete with new forms of energy production. The structure of these tariffs will be a critical determinant of the success or failure of utilities in the future. The authors assess existing and emerging tariff designs to address the advent of grid-connected substitutes such as distributed generation. The economic efficiency and equity implications of changing tariff designs are assessed based on existing and emerging technologies. The chapter concludes that utilities must be cautious in rapidly redesigning their business models or rebalancing their tariffs, as they attempt to recover revenue previously obtained through rising volumetric consumption. Importantly, adjusting tariffs to recover revenues in the short term may hasten the adoption of energy storage technologies, further undermining the financial stability of utilities in the long term.

Role of Utility and Pricing in the Transition

In July 2012, the Australian Government introduced a price on carbon at an initial price of

The Environmental and Employment Effect of Australian Carbon Tax

23 per tonne. Despite the detailed modelling undertaken by the Commonwealth Treasury, there has been continuing speculation about the economic impact of the carbon tax in Australia. In this paper, we build a computable general equilibrium (CGE) model incorporating many new features to model the impact of carbon taxes and to deal with the issue of emissions. The analysis is undertaken by simulating the impact of a carbon tax of

Funding Urban Infrastructure Using Developer Charges The Case of Section 94 Contributions and Road Financing in New South Wales

23 a tonne and reveals some interesting outcomes. For example, in the short run, Australia’s real GDP declines by 0.68%, consumer prices rise by 0.75%, and the price of electricity increases by about 26% as a result of the tax. Nevertheless, the tax allows Australia to make a substantial cut in its CO2 emissions. The simulation results imply an emission reduction of about 12% in the first year of operation. In the absence of compensation, the tax burden is unequally distributed among household groups with low-income households carrying a relatively higher burden.