Carbon price could delay real climate action

March 19, 2011
Coal power dollar chimney.
Coal power dollar chimney.

The ability of real politics to focus debate is impressive. The climate movement has long debated what policy mechanisms can best combat climate change.

Various market based mechanisms, emission trading schemes, regulation and direct government investment have been proposed.

The answer is urgently needed. We know there is already too much carbon in the atmosphere to ensure a safe climate. What we do in the next 10 years is crucial. Heading down the wrong track for a couple of years is time wasted.

The Labor government, with Greens support, has announced an agreement to set a carbon price from July 2012 as an interim measure. After that, an emissions trading scheme will be introduced within three to five years.

Should the climate movement support, oppose or seek to reform this policy?

While the policy lacks important detail, including a starting price, treasurer Wayne Swan's assurance that the price will be “well south” of $45 a tonne of carbon dioxide gives an indication.

In the past, the Greens have called for a price starting at $23 a tonne.

Prime minister Julia Gillard has made her intention clear. She said on February 24, “the hard-wired mechanism here is to move to cap and trade [emissions trading]”.

This fact alone is strong grounds to oppose the policy. Emissions trading in Europe has failed to cut emissions.

However, some climate campaigners argue that while emissions trading may be the aim of the government, the movement should support the legislation to get a carbon tax and then campaign to stop it becoming an emissions trading scheme.

Assuming it is possible to stop the “hard-wired” trajectory to emissions trading, we need to critically assess the impact of a carbon price now and into the future.

The carbon tax announcement has had the economic modelling machines churning in corporate boardrooms and activist bedrooms alike.

What would a carbon tax at $30 or $50 a tonne mean?

According to modelling conducted by Beyond Zero Emissions, a price on carbon between $25 and $70 a tonne “will inevitably lead to a large switch to gas-fired power, with minimal benefits to renewable energy” unless it is combined with other pro-renewable energy measures.

A carbon tax results in a cost burden on fossil fuel power generation. The higher the CO2 emissions, the higher the cost.

Gas-fired power has about half to CO2 emissions of coal-fired power. This means a carbon tax could knock out of the race the dirtiest coal-fired plants, such as Victoria’s Hazelwood power plant.

The relative advantage delivered to lower emissions gas-fired plants would result in a big expansion in gas power. On its own, a carbon tax under $70 does nothing to give renewable energy like wind and solar thermal a “leg up”.

Some activists conclude that the movement should campaign for a very high carbon price.

According the BZE's research, a price higher of $70 a tonne is required for wind power, the lowest cost renewable, to compete in the electricity market.

For technologies capable of delivering the base load power, such as concentrating solar thermal, a price in excess of $200 a tonne is needed for initial plants.

The statements of both the ALP and Greens about the starting point make a price even remotely close to these levels a fantasy. A campaign for $70 or $200 a tonne, in the context of the huge cost of living increases these prices would deliver for ordinary people, is doomed to failure.

For advocates of gas as a “transition” fuel to a low carbon economy, a carbon price is good news.

The Climate Institute, the World Wildlife Fund and Australian Conservation Foundation, are among the organisations promoting a “gas transition”.

Environment Victoria has called for the replacement of Hazelwood Power station with “clean energy”, echoing the green rebranding of gas as “clean” begun by fossil fuel companies.

The biggest problem with promoting gas as a “cleaner” alternative to coal — apart from gas being a dirty climate damaging gas — is that it avoids the big political confrontation with the fossil fuel industry that must occur.

The industry knows this, which is why it was BHP CEO, Marius Kloppers who put a carbon tax back on the agenda last September.

A single, large-scale concentrating solar thermal power plant, capable of 24 hour output would beg the question; why don't we build some more of these things? Klopper and his mates are determined to avoid this question and gas is their solution.

An alternate response to the carbon tax is to campaign for a “carbon tax plus” or “complimentary measures”.

Variously, the “plus” measures are expressed as calling for a gross feed in tariff, government funding for renewables and regulatory measures. All of these mechanisms have merit and could get renewable energy built.

And all of them could work without a carbon tax. So why support a “carbon tax plus” and not just a campaign for the “plus” while criticising the tax?

The biggest problem with this campaign strategy is that it results in effective silence about the dud carbon tax and leaves people with the impression it is a “step forward”.

The idea is that once the carbon price law is passed we will be in a stronger position to campaign for the things we know will get us to renewable energy. But will we?

Gillard's “action on climate” via a carbon tax is a calculated plan to relieve pressure for real action.

Recent history reminds us that Gillard gutted several climate abatement programs after the Queensland floods, including $150 million slashed from large-scale solar projects.

If irony died when Henry Kissinger won the Nobel Peace prize, I suspect Gillard cremated it with her response to the Australia's climate change-related flood events.

Gillard has pointed to the carbon price deal as proof her government is acting responsibly on climate.

The support of the Greens, the Australian Council of Trade Unions and environmental NGOs for this proposal just makes Gillard’s greenwashing task easier.

But the problem is that if the carbon price is put in place and the movement fronts up to the government asking for real climate action, Gillard will be in a strong position to say: “You got your carbon price. Allow it to work over the next few years.”

The argument of last resort for supporters of the tax is that failing to back the carbon tax will deliver a Liberal government.

A strong campaign demanding real action for 100% renewable energy is unlikely to deliver votes to the Liberals — a party riddled with climate change deniers.

If Gillard does suffer an election loss related to climate policy, it will be because the carbon tax policy hands Liberal leader Tony Abbott a kernel of truth to bludgeon the government with; this tax won’t do much to cut emissions but it will cause increases in the cost of goods and services for working people.

Workers earning more than $50,000 a year have good reason to be suspicious about the yet-to-be- announced compensation measures, having just been slogged with the flood levy.

It is a hard fact to face that as impressive as our movement is, we are only strong enough to force the government to roll out climate action trickery and a little bit of renewables funding for press release window-dressing.

By fudging on the carbon tax we send out the wrong message that we are “taking a step forward”.

This will damage our future prospects to grow the movement for real action. The damage won’t be irrevocable, but it will make our job harder.


U wrote this entire article without mentioning what the effective actio should be. Pathetic

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