The Wheeler Centre
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Intelligence Squared: A Tax Won't Fix Climate Change
It’s a debate with a decidedly apocalyptic ring: stand by while the dynamics of life on earth change irrevocably, or try to take action that may slow or halt the process – and in so doing possibly compromise our way of life. Held on the eve of the vote on carbon tax legislation in the Australian parliament, politicians, scientists, academics and stakeholders make their case and plead their cause. Can a tax fix climate change? If not, what will?
Few issues of recent times have divided Australia as much as how we should respond to climate change. The Gillard government’s proposed carbon tax is the most controversial policy proposal in at least a decade. Proponents struggle to convince the public of the link between a new, broad-based tax and climate change mitigation, while opponents wage a war of ideas centred around jobs and household income.
Stuart Allinson, an energy and carbon market advisor, alleges that the idea of paying polluters to reduce their emissions is an illogical one, and contends that a tax would produce only insignificant levels of carbon mitigation. “In short, the climate tax is inefficient,” he argues, “because it will have to operate alongside 237 retained climate policies, and it carries the risk of buying CDM credits for no environmental gain.” He also states that the tax will affect global greenhouse gas levels by “less than one twenty-thousandth”.
Fiona O'Hehir - CEO of the biggest independent trader of renewable energy credits and environmental credits in Australia - explains the efficiency opportunities of a tax- and credits-based reduction scheme. She reasons that Copenhagen Accord was not a failure and challenges the perception that community sentiment is strongly against a carbon tax. She also argues that we since penalties already exist for many forms of pollution, an atmospheric pollution tax is only a next logical step.
A former Young Environmentalist of the Year, Matthew Wright surmises that “the point of the carbon tax is to go to gas”. Instead, he says we should take advantage of currently available technologies being rolled out in Europe, and install rooftop solar panels which can contribute to baseload solar power generation. He also suggests that the Clean Energy Finance Corporation should be renamed the Renewable Energy Finance Corporation: to make clear that its intention is not to rely on “dirty” fossil-based gas supply.
Renowned climate author Tim Flannery emphasises the “polluter pays” principle, drawing on the light hearted example of a boy passing wind in his village. Flannery holds that pricing carbon is a more palatable solution for most businesses because it gives them the freedom to make creative decisions to reduce emissions, rather than simply being bossed around by government regulators.
An economics academic, Sinclair Davidson plays something of a cynical line, arguing that “if we want to have a successful policy, we have to think about how people are” and further, that “this tax will not survive sustained contact with the electorate”. He argues that other measures which don’t ask for self-sacrifice in the name of future generations will be more effective ways to reduce emissions.
Finally, Greens MP Adam Bandt - arriving late after a late sitting of parliament - maintains that “direct action” and a price on carbon should not be seen as mutually exclusive measures. He demonstrates his point with the example of federal anti-smoking campaigns, and emphasises precautionary principles, comparing the tax to an insurance policy for our continued survival.