Time for a carbon tax?

The Australian government announced last week a vague and detail-free plan for a carbon tax as a way to reduce greenhouse gas emissions. It appears to be little more than an “idea” at present. It’s given a massive free kick to the opposition due to Prime Minister Julia Gillard’s unequivocal statement before the last election that there would be no carbon tax under her government. Opposition leader Tony Abbott has made full use of the opportunity with his hysterical “Liar, liar!”-style attacks in parliament, daring to suggest that the idea that a politician might have lied was a truly noteworthy event. Remember John Howard’s “never ever” GST Tony? Or his suggestion that parents had thrown their kids overboard from a refugee boat to gain politically? Or his promise that no-one would be worse off under Work Choices? Of the lies about WMD’s on which was based our participation in the invasion of Iraq? Or (and this one tops them all) the Liberal Party’s promise 2 elections ago to “keep interest rates at record lows”!? Yes there is plenty of form in the misleading and deception department on the Liberal side. But Gillard really doesn’t look very good in all this. She could have been forthright in citing the changed conditions in parliament due to the election that delivered a minority government making negotiation and compromise more necessary than ever before, but probably knew this would lead to a feeding frenzy by those who like to claim that the Greens are really dictating government policy. She could have claimed that she has done some thinking, got more information and more advice and said “before I thought that, now I think this – I’ve changed my mind“. Either of these might have at least mitigated to some extent the fallout from this backflip. Even better would have been to keep the old Carbon Pollution Reduction Scheme as policy through the last election campaign. It might have actually convinced some people that the Labor party stood for something and given them an outright victory.

What is more important than all this political bickering, however, is what is actually the best plan for Australia’s energy future? By putting a price on carbon, you raise the cost of coal-generated electricity which raises power bills, and then there’s the vexed issue of who to compensate for this so the most vulnerable in society are not negatively affected. But if you do compensate too many people, the ones who can afford higher power bills will just use the same amount anyway which defeats one purpose of the price signal – to encourage lower electricity consumption overall. The other purpose of it is to presumably make the price of “dirty” energy higher than, or at least on a par with, “clean” energy. But that assumes there is enough alternative “clean” energy for people to switch to. So now for the real question: Where is the government’s investment in developing renewable energy? Or is it all going to be left to private companies and the market? Investment in the scientists to research viable ways of accessing solar, wind, tidal and geothermal  energy and in the engineers and builders to design and build new kinds of power stations will make us a smarter country, lead to more employment and stimulate the economy. We might even be able to export some new technologies to other countries which are keen on renewable energy, especially if it becomes an advantage under some future international treaty/agreement, and inject a boost into our economy to stop it being a one trick (mining) pony. But we are being left behind in this area.

We need two things to make ourselves a low-carbon-emissions country and so make a positive contribution to what will need to be a global effort to avert or at least mitigate catastrophic climate change. Firstly, massive investment in renewable energy, and secondly, a price on carbon to make the new renewable energy industry economically viable in competition with the cheap(er) coal-generated power we currently have. It seems to me we can’t really have one without the other – it won’t work and will be an exercise in futility. Whether this price on carbon comes from a simple tax or an emissions trading scheme, or some other economic mechanism, I don’t really care. I’m not an economist. Just find something that works and do it. But who will take any leadership on this? So far I haven’t seen much. There is so much FUD about the place about how this will wreck our economy and make us uncompetitive in trade with other countries unless there is a global agreement which forces countries to cut emissions. But what about the positives above, about stimulating the economy with new research, development and construction, and about exporting valuable new technology? Someone please tell me if I’m wrong about these positives – I plead ignorance on some economic aspects but aren’t we smart enough to find a way that works? Surely we are! Some of the negativity I just mentioned is no doubt political ideology, but am I the only one who thinks it’s also because of the cosy (financial and other) relationships between political parties and the mega-rich coal and oil industries with their media power? We’ve already seen the mega-rich mining execs, indignant that they might have to start paying their fair share of tax on the wealth in the ground that doesn’t even belong to them but to all Australians, put on a media blitz, intimidate the government into a pathetic backdown and to a large extent get rid of a Prime Minister. Just who is running this country really? It will take real political leadership to stand up to the wealthy vested interests and make some decisions that are in the best interests of all of us, not just the ones who donate to political parties and call their tune, like established energy industries which might be disadvantaged by a switch to a low-carbon economy. I would hope that the people will respect someone who has the courage to stand up for something despite the difficulties. The drop in the polls for Labor when Kevin Rudd squibbed this issue seems to strongly indicate truth at least on the other side of this coin. Who will provide that leadership? We have had Rudd commit to a positive low-emissions future then lose courage when the going got tough and pay a heavy price for it. We have had Gillard swing this way and that in the wind of opinion polls and finally seem to say she will do something that she said before the election she wouldn’t – with a long time before the next election to try to work out the details and get it through – I can imagine that being a mammoth task. Largely because – then we have Abbott and his cronies carping and whinging from the other side, vehemently opposing any positive moves at all – with the exception of a few like Malcolm Turnbull who might one day make a reasonable Prime Minister. To the extent that the Liberal party has any policy on this at all, it all revolves around paying the big polluters to reduce their emissions, presumably out of the taxes the rest of us pay. A truly ludicrous idea and putting the cart before the horse if Ive ever seen it, and in the long term it doesn’t help the growth in renewable energy at all. But I suppose it would at least keep the mega-rich who pull their puppet strings happy. What has happened since Australia was once a smart, optimistic and courageous country, and who will get us back there?