Rudd's carbon trading — locking in disaster

Climate scientists at the Massachusetts Institute of Technology released a disturbing new study on May 19. Without drastic action, the Earth's surface temperature could rise by 5°C or more by 2100, they said.

This roughly doubles even the most pessimistic predictions made until now. A 5°C warmer world would herald big drops in food production and a rise in extreme weather events.

It would send the planet well beyond key climate tipping points that, once crossed, will mean the planet begins to warm itself regardless of anything humans do. Five degrees means runaway global warming and the end of life on the planet as we know it.

This dramatic warming can be avoided only if governments take "rapid and massive action", the scientists said in a statement.

Study co-author Robert Prinn said: "The least-cost option to lower the risk is to start now and steadily transform the global energy system over the coming decades to low or zero greenhouse gas-emitting technologies."

The Australian government's policy flies in the face of this stark reality.

The government's planned Carbon Pollution Reduction Scheme (CPRS) is designed to protect the profits of the biggest polluters. It won't help cut emissions to safe levels.

Prime Minister Kevin Rudd made new changes to his ineffective CPRS on May 4 — making an impossibly bad scheme even worse.

The revised scheme will hand a further $2.2 billion to Australia's biggest polluters in free carbon permits. The scheme has been fiercely attacked by grassroots climate groups for its dangerously low unconditional greenhouse gas emissions target of a 5% cut by 2020. The start date of Rudd's carbon trading scheme has been delayed until mid-2011.

The complexities of the CPRS — as with other "cap and trade" policies — will create fertile ground for rorting by carbon traders who buy and sell the "right to pollute".

Green Left Weekly's Margarita Windisch spoke to Kenneth Davidson co-editor of Dissent magazine and columnist for the Age. They discussed the failings of the Rudd government's market-based climate policy and some possible alternatives.


What are your main objections to Rudd's CPRS?

I have reservations about 'cap and trade' schemes in general and the CPRS in particular. In general they are complex and complexity creates fertile ground for rorting.

There is not one cap and trade scheme operating which has resulted in reduced emissions from the pollutants subject to the cap.

The countries most successful in reducing emissions have been the Scandinavian countries, Holland and Italy which have adopted carbon taxes. Carbon taxes are simple and cheap to administer, are easy for the public to understand and can be varied easily to achieve the desired reduction in emissions.

Do you think it is possible to have an effective CPRS?

No. And I think the behaviour of the Rudd government shows that Australia will not be an exception to the rule.

Could you elaborate on why you support carbon taxes instead of "cap and trade" policies to cut emissions. Do you see any potential problems with a carbon tax?

The administrative cost of a carbon tax would be broadly the same as for other taxes — about 1-2% of revenue collected.

[Carbon trading] will create a bonanza for those involved in the trading and create a new class of traders with a powerful vested interest in the continuation of trading the new derivative.

The main problem with a carbon tax is getting governments to agree to a new tax. The effectiveness of the carbon tax has ensured that successive Australian governments never have it on the agenda as a serious alternative to cap and trade.

What do you see as the key solutions to the climate change crisis?

First, the Greens and environmentalists should push the Senate to block the corrupt CPRS legislation and hope Australia is forced to adopt a responsible greenhouse gas target based on the 15-45% carbon reduction framework agreement set for implementation at the Copenhagen meeting in December.

A low carbon tax of say $10 a tonne should be introduced as soon as possible. This would hardly be noticed by final consumers (or the big polluters).

The prime objective would be revenue raising to provide $1 billion a year for renewable energy development. The Mandatory Renewable Energy Target should be doubled to 40% by 2020.

You have essentially argued for a "war economy" response to climate change in the Age. What kind of state investment and practical infrastructure do you think is needed?

The developed countries need to adopt now a crash program in building base-load renewable energy generators. Governments should pick winners such as solar, thermal and hot rocks where heat can be stored and used to generate electricity to meet fluctuating demand.

The history of technology shows that "learning by doing", especially on an industrial scale, brings down production costs. The history of World War II shows that given the political will, human, financial and scientific and technical resources can be massively and quickly shifted from civilian to military purposes.

Even in the absence of geo-sequestration, which could add 40% to the cost of coal-fired electricity, or a carbon tax, which would need to be at least $70 a tonne to compensate for the social cost of emissions, it is likely that renewable base-load electricity will be more than competitive with coal-fired power in a few years.

Even at this late stage, it is unlikely that a crash program of investment of scientific, human and financial resources necessary to achieve renewable competitiveness would require more than a fraction of the 30% of GDP the US spent on defence at the height of World War II.

What is your opinion on the demand for 100% renewables by 2020 that came out of Australia's climate action summit in January?

It might be better to think of a transition from coal (particularly in Victoria where there is plenty of Bass Strait gas to replace brown coal in existing power stations).

What role do you see for ordinary citizens in pressuring government and achieving the necessary policy that saves humanity and the planet from destruction?

Somehow politicians have to be made to see that not only is global warming a higher priority issue than the global financial crisis but that the solution to the global financial crisis requires a massive investment in renewable energy.

[Dissent regularly carries articles on global warming. Visit]

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