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A soft start on carbon

Our modest carbon tax is a welcome development, but it is long overdue.

Our modest carbon tax is a welcome development, but it is long overdue.

THE battle to put a price on carbon pollution in Australia started almost two decade ago, in the early 1990s. Yesterday it entered a new phase, when the government formally released its carbon tax package. The proposed tax should pass into law later this year and provide a track to an emissions trading scheme by 2015. This first step towards Australia becoming a clean energy economy is important, welcome and long-overdue.

This is an astute package of measures that will alter Australia's carbon economy in the best traditions of ecological tax reform the burden of taxation is shifted from individuals, communities and jobs to dirty industries in order to encourage greater resource efficiency and minimise carbon pollution. The package raises the tax threshold and guards against the socially regressive consequences of higher energy prices by providing generous, up-front compensation to those on low incomes, tax reforms that will be difficult for any future governments to unstitch.

At only $23 per tonne of carbon dioxide, the tax still sends a powerful signal for industry to anticipate further price increases, but it is not a sufficient incentive for new investment in clean energy, which becomes competitive at $40 or more. Given this, the proposed new Climate Change Authority and the Clean Energy Finance Corporation will be essential both to oversee progress and drive development.

This soft start to economic restructuring reflects the brutal debate and weak public support of recent months. Australian industry lobby groups and conservative politicians have beaten up the carbon tax as a radical and painful measure and Australia's media bears some responsibility for perpetrating this deception. Carbon and energy taxes were introduced in European states - the Netherlands, Norway, Denmark and Sweden - in the 1990s. None came to economic ruin. Before the establishment of the European Union's emissions trading scheme, Germany, under a Social Democrat- Greens coalition government, passed a comparable eco-tax, which was made politically bullet-proof by using some of its revenue to lower industry superannuation contributions.

We are yet to have a sober discussion of the present dangers and looming threats of global warming - the reason for all this fuss. In the narrow tussle over immediate economic impacts, the ''greatest moral issue of our time'' has been sidelined.

At Copenhagen, the international community agreed that average global warming must be kept below 2 degrees above pre-industrial levels. Yet the collective voluntary pledges agreed at Copenhagen will lead to global average warming of up to 4 degrees by the end of this century and between 6 and 8 degrees in the centuries to follow.

The planetary consequences for ecosystems and species - and for human civilisation - would be devastating.

International and Australian climate experts meet at Melbourne University tomorrow to ponder the likely outcomes of this collective policy failure. A key speaker at the ''Four Degrees or More?'' conference, will be Hans Joachim Schellnhuber, chairman of the German Scientific Advisory Council, adviser to German Chancellor Angela Merkel and director of the Potsdam Institute for Climate Impact Research. In 2009, Schellnhuber told the Copenhagen science conference that in a ''4 degree world'' the planet's ''carrying capacity estimate (for humans) is below one billion people'' the world would be transformed into a place hostile beyond the capacity of most people to survive.

Iconic marine systems such as the Great Barrier Reef would be destroyed by rising, warming and more acidic oceans. Less rainfall and an increasing frequency and intensity of floods, droughts and storms would cause Australian farm output to collapse to the point of endangering food security. Certain lethal diseases would become more widespread.

This is the world of climate policy failure that the carbon tax debate has not addressed.

The Intergovernmental Panel on Climate Change in 2007 indicated that industrialised countries must reduce their aggregate emissions by between minus 25 and minus 40 per cent below 1990 levels by 2020 if we are to have a hope of staying below 2 degrees average warming. The Climate Commission rightly calls this the critical decade for action.

Yesterday's announcement adjusts Australia's long-term emissions reduction target to minus 80 per cent below 2000 levels by 2050. But in the short-term, we still are only pursuing a cut of minus 5 per cent below 2000 levels by 2020. Despite Australia being the world's 10th biggest aggregate emitter, with the world's highest per capita emissions, our mitigation effort and short-term target are among the weakest among all industrialised and major industrialising nations.

The United Kingdom has already cut its emissions by 23 per cent and aims to halve them by 2025. Germany has cut by 22 per cent and has a target of minus 40 per cent below 1990 levels by 2020. By contrast, we are setting an example that says to others, ''It is OK to go slow''. The science says otherwise. Understood in this larger context, it is clear that the real price of our modest carbon tax will be paid for by our children and by countless future generations.

Associate Professor Peter Christoff teaches climate policy and Professor Robyn Eckersley teaches political science at the University of Melbourne.


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