Debate: should we defend the carbon tax?

The carbon tax has been a subject of much debate on the left and in the trade union movement. We asked NSW Greens MP John Kaye why he thinks we should defend the carbon tax and how the movement can respond to Abbott’s climate denial. Solidarity’s James Supple responds, and argues the carbon tax is undermining public support for climate action and obscuring real solutions to climate change


Should people who want to see action on climate change support the carbon tax?

I’m going to be out there defending the carbon price package because it is a prelude to real action.

It’s an important advance but on its own a levy on carbon will not drive the reengineering of the Australia’s energy industry and the jobs it will create.

The carbon price goes a small distance to neutralising the pressure from market forces to build and operate more coal and gas.

The highest single priority is to stop the building of new fossil fuel power stations and to begin to the process of closing down existing fossil fuel power stations.

Australia needs a timetable and a fairly rapid one that says we are getting out of coal entirely, we are getting out of gas, and we will be 100 per cent renewable. The technological possibilities are there. If Australia does it properly there’s massive job creation potential in renewables. What is missing is the political will. That can only be created by a mass movement demanding action, not just to protect the climate but also to create jobs in renewable energy.

The focus should not just be on defending the carbon package but also the arguments around closing coal-fired power stations and public investment in renewable energy, particularly solar thermal and wind.

It’s a major improvement on the CPRS, but that’s not to say it’s perfect. I think The Greens Senators and Adam Bandt in Canberra did a very good job.

One of the key positives is that the [emissions reduction] caps are set on a five year basis. The CPRS locked in targets that ran over a 15 to 20 year period which would have meant that responding to the new scientific evidence would have been almost impossible. Emissions trading creates a property right to pollute, which means reducing total pollution requires purchasing back certificates. That can be very expensive.

The biggest problem with the new package is that 50 per cent of the permits can come from overseas. Inevitably the effectiveness of Australia’s carbon reduction would be reduced by the influx of lower-cost but quite dodgy international offsets.

The other major problem is some of the industry compensation goes to the wrong people. There’s no sensible argument for compensating coal-fired power stations or the aluminum smelters. Those smelters have grown fat off the public purse for four decades. We need to make them pay their full cost of carbon. Likewise giving a quarter of the carbon cost back to coal-fired electricity generators makes no sense. They should leave our economy as quickly as possible—there’s no reason for propping them up.

Tony Abbott is attacking the carbon pricing package by saying it will put up power prices and the cost of living. How should people who support climate action respond?

No one should take Tony Abbott at his word. We do have a great big tax on everything and it’s called the Goods and Services Tax. The GST is a good six and a half times greater in terms of revenue collected and even larger in its impact on households budgets than the carbon tax would be. The GST over the next three years will collect about $130 billion in revenue whereas the carbon tax will collect about $20 billion.

The propaganda that Tony Abbott is putting around is entirely misleading. He is playing politics with the future of the planet. He’s feeding the climate deniers, so that instead of just battling the coal companies and the fossil fuel industry to achieve a transition to a jobs rich, , the climate movement has to spend time and resources countering Abbott’s propaganda onslaught.

Some are arguing the carbon price needs to go higher in order to drive the transition away from fossil fuels, what do you think about pushing for that?

Relying solely on the carbon levy to drive changes to Australia’s multi-billion dollar energy industry is not only doomed to failure but also likely to devastate low and middle income households.

While higher prices would mean more money for investment in renewable energy and household assistance, it also means that the job of protecting the most vulnerable from the economic burden would become even more difficult.

There are cheaper, more effective and more rapid ways of cutting carbon. Regulations to set and enforce phase-out dates for coal fired power stations and direct public investment in and ownership of utility-scale renewables would create more jobs and impose a lower total cost on the economy.

Those who argue for $70 or $80 per tonne taxes are justifiably worried that the relatively low rates over the next decade will not secure an end to the growth of fossil-fuelled power stations. I think this just proves the limits to market instruments and the need to see the carbon price as a hand first step on a much more interventionist path.


THE GOVERNMENT claims there is no alternative to a carbon pricing scheme. John Kaye says it’s a “prelude to real action”.

But the carbon tax package will do next to nothing to cut greenhouse gas emissions—and it is fostering a backlash against climate action.

The carbon tax aims to introduce “pricing incentives” and leave the decisions about cutting emissions to corporations and the free market. Instead the government should be guaranteeing renewable energy is built by funding it themselves. Supporting the carbon tax obscures these very straightforward steps that could be taken to reduce emissions and shift to renewable energy.

John says the priority should be to stop building new fossil fuel power stations and that we need a timetable for a renewable transition. We certainly agree with him.

Unfortunately, the focus of the climate movement so far has been to spend time defending the indefensible carbon tax.

The main impact of the carbon tax will not be more renewable energy but a shift to gas power. But new fossil fuel power, both coal and gas, needs to be banned.

Once new gas plants are built they will lock in new sources of emissions for at least 30 years, the life of a new power plant.

The renewable energy technologies we need already exist. In July one of the new solar thermal power plants in Spain became the first to supply uninterrupted power over a 24-hour period. It is able to store 15 hours worth of power from the sun using a storage system.

Over 4000MW of solar power plants will be built in the next three years, enough to replace the equivalent of two and a half Hazelwood power stations. German rooftop solar panels alone will produce 85 per cent of the entire Hunter Valley’s power generation capacity by the end of this year. Spain is also aiming to have wind power alone provide 25 per cent of its power by 2020. Denmark already has 20 per cent and also exports power from wind turbines.

The carbon tax has handed Tony Abbott a gift because it will increase power bills and see costs passed on to workers, sending Labor plummeting in the polls.

It is not surprising so few people trust the government when it says household compensation will cover the price rises. The same thing was said about the GST, but the fact is people were out of pocket.

The carbon tax will also get the blame for wider rises in the cost of living.

Despite Labor promising to “ease the squeeze” on living costs when it came to power in 2007, it has done nothing. In the year to June they rose 4.5 per cent, according to a Bureau of Statistics Living Cost Index.

The Greens have made a serious mistake by tying themselves to the carbon tax. Greens leader Bob Brown admitted in mid-August that, “The presumption that the damage done by gas is half that done by coal is under very serious questioning”. He rightly added that we needed to “move straight to renewables.”

Yet that presumption that we should shift to gas is at the heart of the logic of the carbon tax. This underscores the problem with helping Labor sell a scheme that both won’t cut emissions and is deeply unpopular. It is The Greens’ obsession with using their parliamentary numbers to cut deals that has led to this debacle.

But a climate campaign calling for thousands of new jobs in renewable energy, paid for by government spending to ensure power costs don’t rise, would isolate Abbott and the climate deniers. We could demand that polluting corporations who have made billions out of wrecking the planet pay for this, not ordinary people.

The carbon tax is not a step in that direction.

It will not even deliver Labor’s pathetic 5 per cent reduction target. As John admits, the package allows business to put money into dodgy offsets instead of reducing emissions.

We need to push a stimulus package for the planet, just like the $57 billion spent in Australia on stimulus after the global financial crisis hit. Such a program of government investment in renewable energy, public transport and energy efficiency could slash emissions and create jobs.

Most importantly, it could win back public support for climate action.


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