Exchange rate movements had bigger impact than a carbon price
November 22, 2010
The rising Australian dollar has had a bigger impact on our economy than an $85 per tonne carbon price.
A new Access Economics report says:
Exchange rate movements and the introduction of a carbon price are similar to the extent that both have comparable economic impacts and firms are able to adapt to the new environment.
This means that the recent increase in the price of the dollar has been twice as big a shock as an aggressive CPRS. Some sectors – like higher education and tourism – have experienced some pain, but it is mostly business as usual.
This puts paid to the scaremongering of the climate doves and denialists like Tony Abbott and the Liberals who have said that a carbon price would damage the Australian economy.
The report demonstrates that the Australian economy is flexible and could easily withstand a substantial price on carbon.