Early or late, this year will bring a federal election where all voters can influence policy on emissions reduction and climate change. Philip Walker outlines some policy possibilities.
Australia must properly address its emissions reduction responsibilities now
Federal elections are approaching this year. There is a very important issue we are still not hearing much about. Many Australians are increasingly concerned about the future of our world under the effects of climate change. In spite of this, our decision makers continue to avoid addressing the issue seriously.
Australia remains one of the highest greenhouse gas-emitting countries, per unit of energy supply and consumption.Most Australians are not scientists, engineers or economists. It is difficult for many of us to hold an informed opinion about what measures should be taken in Australia in order to play our proper part in reducing carbon emissions world wide. However voters do have the opportunity to understand the fundamentals and to express their concerns.
A few years back we had the carbon tax. Some politicians, by stressing biased negative argument, soured public opinion about the tax, resulting in its repeal. However, there is considerable informed opinion worldwide advocating carbon taxes or fees to be the most effective form of carbon pricing to adequately address the problem.
A couple of US proposals could be applied to Australia
Economist William G. Gale, a US expert on tax policy, discussed options in the US economy at The Miller Center of the University of Virginia. He said: Carbon taxes would contribute to a cleaner, healthier environment and better environmental and energy policy by providing price signals to those who pollute. Not surprisingly, most analyses find that a carbon tax could indeed significantly reduce emissions.Former NASA climate scientist James Hansen has proposed a “carbon fee” system under which fossil fuels are taxed when they are produced or imported, rather than when they are consumed. Under his proposal, countries would collect a fee when fossil fuels are mined or imported, and distribute the revenue to their citizens, while charging extra border duties to countries without a similar scheme.
Such carbon pricing, used effectively, would discourage emissions in favour of clean energy sources. Whilst accounting for the external costs of impacts on climate and environment, it fairly distributes compensation to the people. There should be no subsequent incentives to selected energy sources. The energy markets should be allowed to determine the mix of clean energy systems used.
In July 2015 Renew Economy published Hugh Saddler’s discussion of the take-home messages from abolition of Australian carbon tax, illustrating the proven effectiveness of the tax in Australia. In reading his conclusions, it is evident that the induced changes were modest in both supply and consumption but were what economic theory would have predicted. Larger impacts of a price on carbon will only appear if the policy is maintained over the long term. Many factors besides the carbon price have influenced changes in the behaviour of electricity consumers and suppliers. Achieving larger and faster emissions reductions will require a wide range of policies, all working in the same direction. A price on emissions, whether through an emissions trading scheme or a tax, will be a key component of such a suite, but only one component.
Professor Ross Garnaut, speaking at University of Technology, Sydney on 24th September 2015, said: Once emissions reduction responsibilities have been allocated amongst countries, it is possible for each country to contribute its share of the mitigation responsibility not only through the application of a Carbon Tax or an ETS, but also by direct regulation of emissions-intensive activity, or by fiscal payments to low-emissions activities, or through multifarious regulatory and fiscal interventions. He indicated that small countries with currently high emissions, like Australia, will not be able to resist indefinitely the pressure from the larger countries to do their fair shares in a global mitigation effort. Sooner or later proper action will be required, which will then be at higher cost than if steady progress had been made from an early time.
Sometimes in Australia we see the leading political parties’ bilateral support for action on selected issues. Why not with action on climate change?
We need to be continually demanding that our politicians put forward policies that, once implemented, would enable us to effectively play our part in addressing world climate change.
Economist William G. Gale, US expert on tax policy, discussing options in the US economy, at The Miller Center of the University of Virginia. The wisdom of a carbon tax
US environmental scientist James Hansen, addressing a “carbon fee” in The Conversation December 2, 2015. James Hansen: emissions trading won’t work, but my global ‘carbon fee’ will
Hugh Saddler, One Year on from the Carbon Price Australia’s Emissions Rebound is Clear, Renew Economy 22 July 2015
Professor Ross Garnaut, speaking at University of Technology, Sydney on 24th September 2015. The Essential Role of Carbon Pricing