Yesterday the Prime Minister of Australia, Julia Gillard, formally launched the government’s carbon tax policy to a packed media room and an anxious public. The environmental tax, which will take effect from 1 July 2012, aims to cut Australian carbon emissions by 5% from year 2000 levels by 2020.
Australia needs to take action to reduce CO2 emissions if climate change is to be limited to a 2°C rise in mean global temperatures by the end of the 21st century.
Of course, this requires the co-operation of the rest of the world and whilst no global consensus has yet been reached on what should be done, many countries have already established emissions trading schemes (ETS) or introduced carbon taxes. In Australia’s case, the carbon tax will morph into an ETS in 2015. Hopefully a global agreement will be reached before then.
I don’t wish to delve into the comings-and-goings of this political issue, which I feel had been one of the most poorly-conducted public debates (both within and outside the Parliament) that I can recall. The discussion has certainly been of the “every man for himself” calibre and I have seen very little forward thinking and community-mindedness on any side of politics. Nevertheless, I have long believed that an Emissions Trading Scheme is the best way for Australia (and the world) to make a real difference.
From an environmental perspective it’s difficult to gauge whether this scheme really goes far enough or not, but my feeling is that it probably does so but with a soft start. Let’s not forget that at the failed Climate Change conference in Bali in 2007, the Australian Government said it supported a 25-40% cut on 1990 emission levels by 2020. Now we are to make a 5% cut on 2000 levels by the same period, although the new long term goal is to cut emissions by 80% by 2050. That is long enough for industry to make necessary adjustments and hopefully enough to prevent catastrophe.
For all the talk, it seems to me that many people don’t understand the point of a carbon tax or ETS. The bleating voices of large sectors of industry demanding “compensation” are becoming tiring.
Make no mistake: I am not anti-business and I understand fully that workers will be the first to suffer in bad economic times. But polluting industries also need to understand that there has to be an incentive for them to change their behaviour. For there will be no business with a dead environment and whilst dirty energy remains cheap, nothing will change. Something has to be done and the absence of a credible alternative, this is the best plan for Australia’s future.
We also need to recognise that every government policy has an impact somewhere. Governmental paralysis would set in if government attempted to guarantee “not one job will be lost” or “no Mum and Dad taxpayers will lose out” et cetera (these are the words of an impoverished debate). The challenge with all policy is to ensure the greatest number of beneficiaries.
From what I can understand, I am reasonably happy with the carbon tax scheme which has been developed jointly by Labor, the Greens and the three independent MPs. It seems to strike the right balance between providing an incentive and not destroying Australian industry. Hopefully this will mark the start of Australia’s green energy transition as carbon tax revenue is used to develop sustainable energy sources such as wind, solar, geothermal and wave.
The challenge (and the true indicator of whether the scheme will survive the next election) will be to monitor the rise on the cost-of-living. According to the government, a cost increase of $9.90 per week can be expected, which includes a rise of $3.30 for electricity and $1.50 for gas. Whilst I consider this to be a modest increase, it comes on top of massive utility bill increases that have eroded the public’s enthusiasm for any more price rises. An average household will receive $10.10 in compensation which will come in the form of various tax cuts and concessions.
I have not been impressed with Julia Gillard since she became Prime Minister and I have been even more scathing of the Labor Party at the state level who forgot who they represented and selfishly increased the price of electricity for households well beyond inflation. That said, Tony Abbott’s confusing “Direct Action” plan worries me greatly, as does his threat to destroy the carbon tax and ETS. Imagine what that would do for business confidence!
I genuinely hope this new scheme works as intended. I believe it is now Julia Gillard’s job as Prime Minister to convincingly sell this plan to the many doubters within the Australian community. She also needs to demonstrate her leadership skills and lead Australia on a positive campaign for change. Finally, lower income earners and the poor need to see that they aren’t the ones paying.