The carbon game is producing some rather odd outcomes. Let me relate just two of them and I am sure more will follow as time goes on.
One issue is the illogical way the carbon tax is being applied to transportation systems throughout Australia. A second, more politically pivotal matter is the tight position Tony Abbott now finds himself in, which I'll discuss in the second half of this piece.
Most people understand that if goods travel by train the amount of carbon produced is substantially less than if they are carted by truck. So theoretically it would make sense if the carbon tax was organised to encourage more goods to go via train.
But what did our bright sparks in Canberra do? First they imposed a carbon tax on goods transported by train. And then, when it came to goods transported by road they did not impose a carbon tax.
Clearly the carbonites in Canberra want people to take goods off the train and put them on a higher carbon road truck. Of course the simple situation was that the truck drivers had much more political clout in Canberra than train drivers and so the idea of saving carbon was thrown out of the window.
Earlier this week, Keith Orchison wrote a very logical piece explaining why an Abbott government was likely to embrace some sort of carbon trading scheme (All roads lead to an ETS, July 3). I am a great admirer of the writings of Keith Orchison and he brings great logic and insight to energy matters. And I certainly couldn’t fault his logic in terms of what the Liberals should do.
But in the election campaign Tony Abbott will be asked at least once a day – but often three or four times a day – whether there will be an emissions trading scheme under his government. With one qualification, if Abbott gives the slightest hint of a ‘yes’ answer then his election campaign will be in tatters. In the minds of voters an emission trading scheme and a carbon tax are the same thing. It is just another way of doing the calculation.
The only qualification is that Tony Abbott can say that he will allow carbon taxing/emissions trading IF the rest of the world goes that way.
But currently the rest of the world is not very interested in additional carbon taxing except for a very small dabble in China. It is unlikely this situation will change by the next election.
If Tony Abbott continues to vow that he would not introduce a carbon tax via emissions trading and then break that promise then he would face the next election as ‘a liar’–exactly the problem that Julia Gillard now faces.
Whatever the logic, the simple fact is that Tony Abbott cannot introduce a carbon tax via the back emissions trading door and retain any credibility whatsoever.
And Tony Abbott is not a fool. He will simply not do that.
What is likely to happen if the government changes is that the multitude of carbon bodies that lie around Canberra and the rest of Australia will be dissolved. Many of the carbonites working in those bodies have long-term contracts and some of them may simply be put in a room to serve out their time.
There will remain the need to reduce carbon but, rightly or wrongly in the rest of the world the carbon issue is becoming less of a priority. Carbonites all around the world have some major selling to do on this front.
As for Australia I suspect that the Liberals will look more closely at how you can use gas to lower our carbon without a massive tax. But that is pure speculation. Those CEOs who are looking to buy carbon credits that apply after, say 2013, are taking a considerable risk and if they lose money on their gamble they will pay a considerable reputational cost.
Life is not easy for a CEO when the politics on an issue like this that is so deeply divided.