Proposed carbon price falls short of climate action

May 27, 2011
Emissions trading.
Emissions trading.

The worst thing about the Labor government’s proposed carbon price scheme is that it’s a diversion from real action on climate change.

Few of its supporters say it will deliver significant renewable energy or emissions cuts any more — only that it will “start the process” and complement other measures.

It won’t really make the big polluters pay, but it will give them millions, if not billions, in compensation handouts.

It is designed to become an emissions trading scheme, which has not brought emissions down anywhere.

The Labor government has said repeatedly that it wants the carbon price to drive a boom in natural gas. But taken over its full life cycle, using gas for energy is as bad as burning coal.

Labor Treasurer Wayne Swan told parliament on May 25 that the carbon price would help the coal industry too. He said: “I am so optimistic about the future of our coal industry because we have some of the cleanest coal in the world.”

This hasn’t reassured the Liberal Party and the fossil fuel lobby. Their campaign against the carbon price has made headway.

They have made countless absurd claims: the carbon price will supposedly shut down industries, destroy regional towns, throw tens of thousands out of work, add thousands of dollars to annual grocery bills and cause rolling power blackouts.

For them, facts just get in the way. Their real messages is that any action on climate will always hurt working people and the climate problem is exaggerated, if it exists at all.

The climate denier crusade has left Labor floundering, but has also had an impact on the big environmental groups and the Greens.

They have moderated their demands and asked for less, pretending the carbon price plan is better than it is in the hope that at least something can be salvaged.

A sign-on statement circulated by Climate Action Network Australia in February said: “Saying yes to a price on pollution means saying yes to investment, innovation, and new jobs based on renewable energy that never runs out.”

But there is no evidence Labor’s carbon price will deliver these things. Supporting the carbon price in this way does nothing to pressure the government to go further — it takes the pressure off.

The federal Greens have made some big policy concessions to Labor in the carbon price negotiations.

In 2010, the Greens agreed to compromise on the emissions cut target for the carbon price, accepting that Labor would not go beyond its tiny 5% reduction by 2020.

On May 25, Greens leader Bob Brown said the party would compromise on the actual price too — abandoning its preferred $40 a tonne for Labor’s $20 price.

And in return, Labor has conceded nothing.

Through this process, the most important climate measures — public investment in renewables, mass transit, energy efficiency and sustainable farming — have been sidelined.

A well-designed carbon price could play a positive role. But market mechanisms cannot be the driving force in the transition we so badly need.


What is a well `designed' carbon price?! How could it play a positive role?! Talk about blowing your trumpet about the failings of the greens and then more or less suggesting the same approach, except kinda hide it behind an appeal for the `most important climate measures'. Good grief.
Sorry Anonymous, but if we want to bring emissions down in the desperately short timeframe we've got left, the most important climate measures are widescale public investment in clean energy, transport, sustainable farming and other measures. No market-based scheme can do the job, governments have (to be forced) to do it. That's not the "same approach" as what's on the table in the mainstream carbon price debate. Nor is this important question a case of "trumpeting" the failings of the Greens. The NSW Greens have a very good policy of public investment in renewable energy, but the federal Greens are risking a lot on a market-based scheme which is very, very unlikely to make a difference to greenhouse gas emissions ... and that's a big problem for all of us as global emissions reach record highs. A carbon price (levelled at the point of entry, i.e. the wellhead, port or mine, and designed to help keep fossil fuels in the ground) could play a positive role if it was a subsidiary or secondary policy, which did not diminish an emergency public investment drive to transform the economy.
Of course we need dramatic changes forced by mass action - that's not what I referred to on your need to still promote some sort of carbon price/market mechanisms to play a `positive role'. Sorry yourself Simon, but that explanation for a `well designed carbon price' is pretty light on and frought with contradiction. There is too much at stake. Especially as it muddies the water as to the complete failure of any market mechnisms anywhere to reduce carbon emissions. It makes no difference at any point of the production chain where you introduce it. If you want to control it at the wellhead or point of production, you stop it by the same mechanisms to bring about the mix of sustainable development, transport planning and renewable energy that we and the planet need. Why promote something that is destined to failure and /or making working people foot the bill? Is it because you don't want to offend some liberal northen hemisphere environmentalists who are peddling this as a viable solution? It ain't going to play any meaningful role to bring about the changes needed. zip. It is a distraction.
Anonymous, I have no in principle objection to taxing the heck of the biggest polluters. But the point made above is that the carbon price plan on the table will delay the transition to a zero-emissions economy, not hasten it. So again, a carbon price could play a useful role. but only if it was part of a wider plan to rapidly phase out fossil fuels in the timeframe needed. Public investment will have to play the crucial, central part in this plan — even the best carbon price scheme is still a minor aspect in comparison. The science says we need to make the transition to zero emissions without delay, a ten-year transition. Also, any carbon price or tax could only play a positive role if it did not make working people foot the bill. This is no endorsement of market solutions to the crisis. As this article explains, carbon markets are part of the problem It seems you oppose bigger taxes on polluters in any and all circumstances. In doing so, you are relying on an abstract, anti-capitalist formula.
Simon, please, it would be helpful if you addressed the questions I asked clarification on, not point to other bits of bling and glitter in the article or others you refer to - or that somehow I denied the importance of what needs to be done to halt the slide towards catastrophic climate change. How is a `well designed carbon tax' going to work, or be possible, even as a secondary, or partial, or miniscule part of what needs to be done? How and why is it necessary? How can it be enforced at the point of production without working people or the disenfranchised paying for it? Why dangle it out there, as GLW has done in previous articles, as plausible or even possible? These are not abstract questions, as you put it. It is a very important question precisely because there are such high illusions in what a carbon tax in any form can deliver. It is not an abstract feel-good anti-capitalist notion, because it won't be the polluters who foot the bill.
The "bits of bling and glitter" you refer to are actually my argument. Public investment to transform the economy along sustainable lines is the crucial measure. The science says we need to transition at emergency speed, there is no practical way this will be achieved without a huge public works program. Building wide support for this project is the big challenge, and it means a drawn out confrontation with Australia's corporate elite who are resisting change. The difference between us is that you feel it important to rule out in advance any kind of higher taxation on the big polluters. And you say is important because we need to combat the high illusions in carbon tax that exist. I don't think its useful, or convincing, to make such a sweeping judgement. It makes little sense to rule out any any and all measures to tax corporate polluters more to help pay for the transition. But any carbon price proposal should be put up against the criteria of whether it helps or hinders. I listed some of these in this 2010 article "Questions for a carbon tax" In the article I said: "If a carbon tax was adopted as a substitute for serious public investment in renewable energy the result would be disastrous. So the key questions to ask about a carbon tax are: who pays, who benefits, will it cut carbon and what other measures go with it?" But as to your question asking me to describe how a well designed carbon tax of my imagination is going to work at some point in the future ... that is a completely abstract question at this juncture. The point is that, right now, given we've overshot natural tipping points in the climate system, even the best, most equitable, most well designed carbon pricing scheme imaginable means nothing ... a large-scale public works program to transition to a zero emissions economy is what we need. So whether you have illusions in carbon pricing or not, we've got to raise public investment and win wider and wider support for it.
The question is, what is the driving the adoption of a carbon price? I think Simon has made the point quite well that we can't rely on a carbon price to drive a decarbonisation of the economy. I've posted an argument on my blog borrowed from Sharon Beder which explains quite well why an ETS in particular is ineffective at driving large scale change: see But if you're trying to raise revenue, and/or punish fossil fuel industries, a carbon tax may be one option. How you levy it is a matter for discussion; who you allocate compensation to (and how) is another matter. Carbon intensive industries are unlikely to be able to pass on all the costs of a carbon tax to the end consumer, especially as they face increased competition from non-polluting energy. An anticapitalist could protest that we should just ban or nationalise then phase out the carbon intensive industries. That is a nice idea, but the ability to do it depends on the balance of forces in government and in the economy and society broadly. That is why I wouldn't rule out other ways to attack the big polluters such as a carbon tax. That's not to say I think carbon taxes are a great idea in general; most especially, as you can read on my blog also, I think the current proposal for Australia (a "tax" that rapidly becomes an ETS) is potentially a major setback. However, while we can debate the merits of ideal carbon taxes in hypothetical scenarios, the best outcome would be to campaign for direct measures that build renewable energy and restrict fossil fuels - e.g. a ban on new coal mines and gas exploration, for example, or a feed-in-tarriff for utility scale renewables or other direct government support to renewable energy, or a massive extension of urban public transport and rail freight. Exactly what the government does to respond to our demands once again depends on the balance of forces. Currently they are proposing a seriously shitty tax-to-ETS. Possibly pressure could force them to make it a more useful renewables-funding carbon tax or possibly we could achieve something much more; that is a question for strategy and doing our bit to maximise OUR forces.
Simon, as you say: ``even the best, most equitable, most well designed carbon pricing scheme imaginable means nothing''. I agree. I'll hum it all the way to the next climate change rally as I ride my bike. That's what you should've ended the editorial with - not your own `abstract' phrase, about a `well designed' carbon price playing a positive role - which surely you must have had some notion about - or `imagined' - what that could be prior to you or your GLW buddy writing that line.
To clarify, my point is that it "means nothing" in isolation, it means nothing unless we are taking the measures to phase out fossil fuel use in the timeframe we have left. Action on climate change requires we decarbonise extremely quickly, as this article from David Spratt explains But the difference between us is I think its wrong, its dogmatic, to rule out in advance any kind of higher taxes on polluters. A "well designed" carbon price — i.e. one that hits rich polluters, is progressive and helps keep fossil fuels in the ground — could play a positive but secondary role, positive only if it complements the most important measures (of which I've outlined my views about a few times below).
Simon says: ``But the difference between us is I think its wrong, its dogmatic, to rule out in advance any kind of higher taxes on polluters''. That's just your assumption Simon, of what I think - nowhere in the string have I said or argued what you attribute to me. I have commented that every such scheme to date has failed and queried why you still think it's a good idea (even if a minor part of the big picture of what needs to be done) and how it could work. I have been trying to have you explain your need to still promote a so-called well designed carbon scheme, under what conditions, and you fob this off as an abstraction, not possible to `imagine' or conceptualise and then infer that I have an attachment to a dogmatic position! Maybe that leaves me with an assumption you don't really know what you are talking about, but I'll put that thought aside, and wait for the next article that promotes a `well designed (but an unimagineable, abstract) carbon tax. Thanks for the exchange, enlightening.
In my experience, the activists in the climate movement who say no carbon price, no market mechanism, ever - don't get any hearing from most of the other people in the movement. It's abstract anti-capitalism. A more practical position is to look at the balance of forces and seek to change it so that we can implement as much as possible of our agenda. Like I said in an earlier post, to rule out in advance any carbon tax as part of that would reduce us to being ideologues rather than campaigners. Besides, your nitpicking seems to miss the whole point about the carbon price in Simon's concluding comment to his article - the comment about possible, hypothetical carbon prices only serves to underline how crap the current proposal is, not to promote any particular future hypothetical model. Your desire for petty point scoring seems to have taken over. BCC

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