Green reasons to oppose Australia’s carbon price

July 22, 2011 at 9:59 am 1 comment

Critics of the Gillard government’s proposed carbon price get daily coverage in Australia’s mainstream media. But some types of critic — those who want Australia to stay a polluter’s paradise — are heard the loudest.

Other views, which argue the carbon price plan is a dangerous diversion from real climate action, are mostly frozen out.

Below are four green reasons to oppose the carbon price.

1. Emissions and fossil fuel use go up

For a policy that is supposed to drive Australia’s carbon emissions down, the carbon price does a very bad job.

Treasury modelling for the carbon price says Australia’s domestic emissions will rise by about 10% in the next 15 to 20 years.

It says by 2020, coalmining will rise by 45%, gas mining by 100% and iron ore mining by 104%.

By 2050, it says coal production will be 109% higher than in 2010. Gas production will be 155% higher and iron ore production will be a whopping 408% above today’s level.

Output in the Australia’s other main emissions-intensive industries — aluminium, alumina, cement, chemicals, oil refining, paper and steel — go up under the carbon price.

Road passenger transport will go up. Road freight transport will go up. Forestry will go up. Air travel … you get the drift.

Meanwhile, the world’s top climate scientists are emphatic that we cannot afford to delay driving emissions down.

German climate scientist Hans Schellenhuber told ABC’s Lateline the world is on track for four degrees of warming by the end of the century.

“And, by the way,” Schellenhuber said, “Australia is surrounded by oceans – four degrees sustained for a while would mean at least seven or 10 metre sea level rise; probably it would melt down all the ice on this planet. That accounts to 70 metres, seven oh, metres in the long term.”

We need a plan to phase out polluting industries and replace them with clean ones. But the government’s plan will entrench the fossil fuel economy for decades to come.

2. It pays out to polluters

The whole point of the carbon price scheme is to create a price signal that makes pollution more expensive and clean technology cheaper. But the billions of dollars it gives out to big polluters sends the signal the other way.

The polluters’ compensation package rewards their bad behaviour. It turns the polluters pay principle on its head: now polluters get paid.

The excuse for paying polluters is to protect jobs. It would be much better to spend these billions creating new green jobs for workers and communities that now depend on polluting industries to make a living.

Some have defended the carbon price on psychological grounds, saying it sends a strong message to business that they will eventually have to change their ways.

But surely the message business has learned is that lying, scaremongering and manipulating the political process pays off — big time.

The big polluters have learned that if they make false claims about company shutdowns and job losses, the government will take money that could be spent on renewables and hand it to them instead. It’s a bad precedent.

We need a plan that ends government subsidies to polluters. But the government’s plan gives them more.

3. Markets are bad at structural change

Modelling for the carbon price says not to expect Australia’s emissions to fall soon, but it does predict the carbon price will help cut emissions in other countries.

Australian companies will pay these other countries some money and get carbon offset permits in return. The carbon price plan allows Australian polluters to cash in these credits and claim to have therefore cut Australia’s emissions.

Carbon offsets are the way the government says Australia will reach its 5% emissions cut target. They are, to put it politely, a gigantic scam.

When you buy a carbon offset, what exactly are you buying? No one can tell you for sure.

Carbon market researcher Larry Lohmann said in a 2008 article, carbon offsets assume “knowledge we don’t have”.

He said: “All these ‘carbon offsets’ are supposed to be climatically equivalent to cutting your coal, oil or gas use.

“But you can’t prove that. You can add up how much greenhouse gas your offset ‘saves’ only if you assume that without it, only a single world would be possible. This assumption has no scientific basis.

“Researcher Dan Welch sums up the difficulty: ‘Offsets are an imaginary commodity created by deducting what you hope happens from what you guess would have happened.’”

When emissions trading begins in 2015, Australian companies will also trade carbon credits between each other.

But even if Australia’s emissions trading scheme worked as it is supposed too — and it has failed everywhere else it has been tried — it would still set us back.

Carbon Trade Watch’s Kevin Smith said in a 2006 BBC News article that all emissions trading schemes favour cheap, short-term measures and penalise rapid changes to cut emissions.

“[Emissions trading] schemes allow us to sidestep the most fundamentally effective response to climate change that we can take, which is to leave fossil fuels in the ground,” he said. “This is by no means an easy proposition for our heavily fossil fuel dependent society; however, we all know it is precisely what is needed.

“What incentive is there to start making these costly, long-term changes when you can simply purchase cheaper, short-term carbon credits?”

Lohmann said it’s not reasonable to rely on carbon pricing to solve the climate dilemma: “Prices can do many things, but one thing they have never done is solve problems that require structural change in so many fundamental areas of industrial life.”

We need a plan that puts people and planet first. But the government’s plan is to extend the market to more aspects of nature and hope for the best.

4. There is a better option

We could redesign our economy along sustainable lines very quickly, if there was the political will. The good news is Australian governments have done this kind of thing before.

Australia’s energy system was built by public investment, as were its transport system, its agricultural system and even its banking system.

A serious response to the climate change emergency would have the government do it again — this time creating many thousands of secure, well-paid green jobs in the process.

Rather than new fossil fuel power stations, the government could invest in large-scale wind and solar thermal plants for all our energy. Rather than new roads, it could build high-speed rail connections and expand suburban mass transit.

Rather than giving handouts to coal companies, it could plow that money into making the Hunter and LaTrobe valleys renewable energy manufacturing hubs.

Rather than yet another big business tax cut, it could increase the rate a few notches and use the money raised to help farmers redesign Australia’s food system so it can withstand a warmer climate.

Public investment in a green economy is the smart economic move too. Once a 100% renewable energy system is in place, there are no more fuel costs. That would save Australia billions of dollars every year, forever. Within decades the investment will be repaid — a nice bonus to go along with a safe climate and an inhabitable planet.

The reason there is no widespread discussion of the public investment option is because vested interests and pro-market true believers dominate the mainstream debate on climate solutions.

Most economists and governments insist that setting up a market — a market that trades in imaginary commodities — is the most efficient and cost effective way to cut emissions. Some big green groups have come to accept this framework and keep their policy advice within its bounds.

But this had not produced the kind of climate policy ordinary people will rally around — as the carbon price polling shows.

The giant holes in the carbon price scheme are helping Tony Abbott’s campaign to become the next prime minister. And Abbott openly promises to take no serious action on climate change whatsoever.

A bad policy like the carbon price makes it harder to convince the Australian people that genuine action on climate change will make their lives better.

We need a plan that is hopeful and inspiring, a plan that can work. But the government’s plan repeats the mistakes of the past and sticks with business as usual.

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Entry filed under: Carbon offsets, Carbon tax, Carbon trading scheme. Tags: .

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1 Comment Add your own

  • 1. Jay  |  September 12, 2011 at 10:27 pm

    I agree with some fundamental points of the argument but in reality Australia’s economy is built on digging up natural resources. A ‘leave it in the ground approach’ is impossible when coal is the main fuel for electricity and a main export. Making polluting a rising cost burden for large polluters will drive them to seek less polluting alternatives. Key things need to happen to make it a successful transition to a low carbon future. The carbon price needs a constant upward pressure to drive sustainable alternatives as fast as the market would allow it. Minimum rising efficiency standards for consumer goods. Choking and eventually cutting off government tax incentive schemes that promote pollution such as business vehicle fleets and subsidies to mining.

    Reply

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