Gillard's carbon tax sales pitch
July 07, 2011
This Sunday, Prime Minister Julia Gillard will conclude what ABC journalist Annabel Crabb has described as its policy striptease over pricing carbon. After months of acrimonious public debate in which even scientists and economists copped stray punches, the Federal Government will finally detail the carbon scheme formulated by the multiparty climate change committee.
At this stage, the legislation is expected to pass both houses of Parliament. So why is Gillard taking the unusual step of making a statement on national television this weekend, followed by a five-week sales pitch during the parliamentary winter break?
Well, why wouldn't she? This is the fight of her political life.
No Greek tragedian could have written such a delicious twist. After reportedly convincing Kevin Rudd to defer the (flawed) Carbon Pollution Reduction Scheme, then stating at the 2010 election that she would not introduce a carbon tax, Gillard is now staking her government on a climate change policy that few completely understand and many resent.
She needs to successfully prosecute it if her government is to withstand further assaults from the Opposition regarding its 'mandate'. She also needs to insulate the public from the pro-industry ad campaigns that will surely hit television screens soon.
The carbon tax is a complicated sell. The main question people are asking, 'Will I be worse off?', does not have a brief, reassuring answer. Any emissions reduction scheme worth implementing is bound to hurt. It is no surprise that public discourse has focused on exemptions and compensations.
This is appropriate to a degree. The cost of any economic reform must be justified when its benefits are unclear in the public mind. People are likely to see initial price increases, before emissions-based price differentiation starts shifting them toward cheaper products that happen to be less-polluting.
With Treasury anticipating a blowout in the first couple of years of implementation before the scheme becomes budget neutral, it is not voter-friendly policy.
What gets obscured in all this is the idea that there is scientific and economic consensus around carbon reduction as a legitimate response to climate change. Markets around carbon credit are already being created in Europe and Asia. Gillard has had to contend with a sideshow debate on anthropogenic climate change that other world leaders have not.
In fact there is nothing radical about fixing a carbon price as the precursor to an emissions trading scheme. It provides a concrete, stable base from which a market can be built. (It is ironic that traditionally pro-market Liberals would be so resistant to a market-based mechanism for addressing this problem.)
An emissions trading scheme is all but inevitable anyway. In case anyone has forgotten, Australia is a signatory to the Kyoto Protocol, which specifies this as one of the mechanisms for reducing greenhouse gases.
The first commitment period for this international agreement will expire next year. While our politicians and pundits quibble over the carbon price package, the rest of the world is already operationalising its commitments. For instance, the European Union Emissions Trading Scheme is now in its second trading period since its 2005 launch.
Embarrassingly, while the EU made a pre-Copenhagen commitment of a 20 per cent cut on 1990 levels by the year 2020, the Australian Government insists that it will not raise its 5 per cent cut on 2000 levels until it is satisfied with the credibility of 'both the specific targets of advanced economies and the verifiable emissions reduction actions of China and India.'
Yet the Clean Development Mechanism, another Kyoto Protocol instrument, is being taken up significantly by these very countries. Once used as examples of inaction, China and India account for the largest proportion of CDM-registered emissions reduction projects, through which they earn certified emission reduction (CER) credits that can be traded and sold.
In other words, Gillard's greatest challenge in selling the carbon scheme is in normalising it in the public mind. She needs to overcome the island mentality that is hijacking debate on this policy.
Market-based climate action is not at all radical or catastrophic when seen in the light of movements in the international community. We need to be part of this broader shift. Otherwise, we may be facing a new wave of 'cultural cringe'.
Fatima Measham is a Melbourne-based writer. She blogs and tweets.
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08 Jul 2011
I would like to point out that the Prime Minister did say in her Climate Change speech just before the last election, that she favoured an Emissions Trading Scheme.
Her statement, as reported endlessly, and gleefully in the case of Tony Abbott, and his supporters in the media, is incomplete.
What she actually said was,
"There will be no carbon tax under a government I lead. What we will do is we will tackle the challenge of climate change".
Labor MPs have been saying all along that average taxpayers will not be taxed on carbon, and less than 1000 big polluters would be paying the carbon tax.
It's not that hard to understand so one could conclude that the reportage as it stands has been deliberately mis-leading.
Will the hoardes of scribblers who have been working hard on behalf of those big polluters now make amends and tell the truth?
Don't hold your breath.
08 Jul 2011
This scheme is typical Gillard. It will be weak enough not to lose votes, visible enough to imply government action.has been initiated. Result - a no principled, expensive piece of compromise exhibiting Julia's cynical pragmatism and desperate need to cling to power for its own sake.
08 Jul 2011
Fatima, good article promoting a con. When a theory has a wrong starting premise, no amount of fiddling of the data will enable it to come up with a valid conclusion. The whole of the earth's climate history needs to be looked at NOT just the last 100 years or so.
The two biggest influences on global climate are the sun and clouds. All the models which are being used do not take into account either of these key influences and therefore predict incorrect results. The science on AGW is not confirmed and there is no global consensus. This theory like all scientific theories must be comtinually tested and refined to achieve a better conclusion.
As to your point that Australia is being left behind by other countries, the Productivity Commission's limited look at what is happening in several other countries put us in mid field. Many of them are actually winding back their schemes as they are finding it is having major adverse impacts on their social and economic life.
08 Jul 2011
Gillard is conning Australians. More and more of them are realising it.
08 Jul 2011
Surely when Tony Abbott groans about a Great Big Tax he must be referring to the GST. That hurts the poorer more than the richer, and there is no way to get out of it by prudent behaviour.
Why isn't there the same fuss now?
08 Jul 2011
A carbon tax is about the most stupid thing any Government can do. For example, 90% of people are going to be compensated for higher cost of living resulting from the carbon tax. It means for 90% of people there will be no incentive to reduce energy use, the Government will compensate. The Government also promised to compensate business for higher costs due to carbon tax. Again, what incentive is there to reduce energy use if they get compensation? It leaves us with a few companies and individuals which will not be compensated. Either they are rich, which means it is unlikely they will switch off the air-conditioning in summer and stay frozen in winter. Then there are the large “polluters” like electricity companies. They will pay the taxes and pass it on to customers and the Government will compensate the customer for it. Where in the hell do we see any way that the energy use is going to be reduced? I am sure if we would use the brightest people in the country to come up with something as stupid as a carbon tax, they would fail.
08 Jul 2011
Again we have an essay that implies that if you believe in reducing emissions you must take this governments carbon tax and conversely if you oppose the tax you are a carbon denier .
Well I believe we have to reduce our emissions and I strongly oppose this tax .it is a compromise that does not work because it assumes we can get all of our reductions from electricity , where $40 per ton is needed to make base load gas feasible and in Victoria we don't have any gas anyway ,and from sending industry offshore which has been a long term Canberra policy anyway .By excluding transport were the technology is available in smaller diesel or high tech petrol we don't get the most efficient savings available while we fool ourselves about achieving targets that cant be measured in our lifetime .
It is easy to be cynical and see this as an exercise in wealth redistribution , that is if you can get over the cynicism of the backflip .
Both sides are treating us like idiots and I think the Australian people have had enough .
08 Jul 2011
Thanks Fatima for reminding us that Australia is one of the few countries where the serious debate about how best to reduce emissions is still being sidetracked by the deniers of anthropogenic climate change. While the science will never be irrevocably settled (that's the nature of science), the evidence is sufficient to justify us accepting the theory and acting upon it.
And thanks for reminding us that using markets and taxes to influence personal and corporate behaviour is nothing new. Excise and import duties, road taxes, tip taxes, congestion taxes, alcohol and tobacco taxes, are all about changing the way in which individuals and corporations spend. There is no doubt that all of these taxes increase the immediate cost of living for individuals, but without them the long-term costs to the community and economy would be even greater.
The real test of the effectiveness of these sorts of taxes is whether the consumer has an alternative. Import duties are effective if one can buy locally, road taxes and congestion are effective if there are other means of transport, and carbon taxes will be effective if it shifts consumers to less carbon-intensive purchases.
The nasty taxes are those like GST which, as Valerie points out, cannot be avoided. Stamp duty on property transactions and insurance premiums, and service charges on energy and water bills are other examples.
08 Jul 2011
It is simply disingenuous Fatima to imply that the rest of the world is implementing a carbon tax. I'm in the US at the moment and no-one I speak to has even heard of the concept of a carbon tax or an emissions trading scheme. What they have done here is massively upgraded freight rail infrastructure and for the first time are taxing diesel (just like we have done for decades) so as to reduce the number of huge trucks (and the congestion they cause) on the interstates. This, rather than a "carbon tax" has made a big difference.
08 Jul 2011
Commercial interests are spending hugely on advertising against proposed government action to deal with climate change. Their aim is to maximise profit in the short term without regard for future generations.
That's why Julia Gillard is trying to compete by making a public event of the announcement of planned action.
She should be honoured for adhering to principle despite the danger of unpopularity and losing votes.
08 Jul 2011
Just noting the announcement of an independent statutory body that will dispense $3.2 billion toward renewable energy. Clearly this amount is not enough, but as part of the carbon price package, it serves the point that creating a reduced-emissions economy requires both a trading scheme and funding certainty for innovation in renewables.
Also, this policy cannot be simplified as 'Labor policy,' given that it was crafted along with the Greens and a couple of the Independents (Windsor and Oakeshott). It is as 'mandated' as can be.
08 Jul 2011
Thanks to the detailed media leaks and the well-publicised individual done deals with various crossbenchers, there’s really no need for anyone to interrupt their routines this Sunday to hear Prime Minister Gillard present what’s left of her carbon tax on television. Like children, we’ll have all dutifully journeyed through the requisite number of ‘sleeps” as dictated by the manager of government business in federal parliament, Mr Albert Albanese, but Santa’s already delivered the goodies, avoiding sooted chimneys.
Equally, there’s no need for the Prime Minister to expose her shoe leather to any wear and tear criss -crossing the nation for any individual explanations to hopeful individuals. Those who’ve sought answers have been denied, muzzled, or ridiculed, and only the naieve wait to be surprised.
On the upside, in regard to the reported likely $4billion blow out in exemption costs, perhaps the federal parliament can now be sold off, rented or turned into a tourist attraction given the government has deemed it no longer the place to announce, detail and defend matters of significant political interest to the nation at large.
The Greeks can be thankful that they only lost their economic independence this week –our democracy’s been junked and we didn’t even get a say in it!
08 Jul 2011
I heard the head of the CFMEU interviewed on ABC newsradio earlier in the week. He was all in favour of the carbon tax. He also predicted a bright future for the coal industry. There was plenty of investment and most of the miners' jobs were secure well into the future. Marius Benson, the interviewer, did not quiz him the obvious contradiction. If carbon pollution is the main cause of catastrophic global warming or climate change, how can any moves to save us from ourselves allow the coal industry to continue? At least the Greens follow a consistent line in their logic and want to see an end to the use of coal. Those like the CFMEU head are suffering from a severe case of cognitive dissonance. You either look to utlimately phase coal out as a source of energy or you don't.
08 Jul 2011
There is no 'consensus' on the science or economics of alleged anthropogenic global warmning. Read Prof Bob Carter (The counter consensus) and Prof Ian Plimer (Heaven and Earth.
Listen to Lord Christopher Monckton on the mathematics and statistics. Science is not resolved anyway on consensus headcounts!
No current scientific effort has been able to measure the proportion (probably very small) of CO2 AGW cause by humans in the total greenhouse warming (which is gradual not galloping) going on mostly due to natural factors (sun and clouds).
08 Jul 2011
Of course the production of base load electricty from Uranium is almost Carbon free and very competitive in price.
09 Jul 2011
Thanks Fatima and Ginger. I think you both have it right. I think the great majority of climatologists agree that climate change is upon us and that it is substantially caused by human activity this time. They have looked at the evidence over millions of years, not jus the last 100. We need to do something, all in our power, to reverse the trend, which, if left unchecked, will be disastrous for the planet and future generations. We may disagree about the best way of doing this, but the Government must make a decision on what they think is the best way. They have decided to start with a carbon tax followed by an emissions trading scheme, which as Fatima points out, is our obligation under the Kyoto protocol. It will hurt everyone financially but surely we must accept that, and compensate the vulnerable as much as we can, if we are to get the required job done.
11 Jul 2011
As the old songs says - "it ain't what you do it's the way that you do it". Other countries have found taxing carbon has not led to change of behaviour. The Australian Productivity Council compared us to other countries, none of which have resource dependent economies. So their premise is not correct. We are burdening an already debt burdened economy where we have little regard for the businesses, farmers and skills we have here. We have the skills, we have the knowledge but the people consulted feel good but are not practical and do not realise how to turn "ideals" into practical reality where we create jobs, develop skills and reduce our use of finite resources. Large companies will take their business off shore, hide their profitswe are giving hand outs on borrowed money from China and small businesses and tax payers will be left to pay the bills. The economic rationalists need to talk to real people, facing real cost rises, and listen to those who have the answers here already working in industry, supplying practical solutions not just a talk fest and "feel good" greenies. As a once innovative clever and productive country why not come up with our own solutions. Others ways do not always suit us. I work at the practical end of sustainability and see daily the opportunities are being squandered with our taxpayers money - yet again.
12 Jul 2011
Yet again I hear Julia Gillard talking about the great threats to our planet because of carbon pollution. The globe is warming dangerously. Catastrophic climate change is upon us. The sea levels are rising. (And she accuses Tony Abbott of scare campaigns!) This is all due to carbon pollution. But don't worry ladies and gentlemen, the future of the coal industry is bright and secure. What a farce.
If there was any consistency to her logic, she should be banning coal full stop. But no! It is going to be exported. Won't that deadly, dangerous, noxious gas CO2 end up getting into the atmosphere when it is burnt in China or wherever? Come Prime Minister Gillard, you cannot have it both ways here.