Gillard dragged down with the carbon tax

Julia Gillard’s political fortunes are going from bad to worse. Opposition to the carbon tax is clearly a key factor.

In late July, Newspoll reported that she had slipped behind Tony Abbott as preferred prime minister. Labor’s primary vote dropped to a record low of 30 per cent. A Nielsen poll a few weeks earlier put it at 27 per cent.

The carbon tax is draining public support for doing anything on climate change. An annual Lowy poll released in June found just 41 per cent think addressing climate change is a pressing issue, down from 68 per cent in 2006. Much of this shift is due to fears about climate action coming at the expense of living standards. The proportion of people saying they aren’t willing to pay more for climate action has doubled in the same period.Details of the carbon tax that have leaked out show it will do little to help renewable energy

Understandably, many people support a carbon tax given Tony Abbott’s hysterical campaign against it. Abbott is driven by the Liberals’ desire to do as little as possible about climate change. His concern for people’s living standards is pure hypocrisy from the party that introduced WorkChoices and the GST.
But it is the policy of a carbon tax itself that is hurting support for action on climate change, because it will lead to higher power prices for ordinary people.

Carbon tax details emerge
Details of the carbon tax starting to emerge from negotiations show that it will not provide the renewable energy we need.

Labor and The Greens are preparing a carbon tax of around $20/tonne. A price this low won’t have any noticeable effect on coal-fired power generation. Consulting firm ACIL Tasman told Business Spectator that, “to see a switch from coal to gas, we would think a carbon price of something like $70 to $80 a tonne [is necessary]”. A new coal power plant has just been approved in Victoria, to be built by private company HRL. It has already factored the cost of the carbon tax into its business model.

Many people hoped that The Greens would be able to extract serious concessions from the government, given their control of the balance of power in the Senate from July. But, having invested so much in the multi-party negotiations, The Greens cannot afford to see them fail. They are just as captive to the need to get some kind of carbon tax through as Gillard is.

Bob Brown said recently he believed that, “the big problem with [the CPRS in] 2009 was it locked us in for 10 years at least with no flexibility to move”. In other words, even if the tax has a pathetically low starting price and is next to useless, The Greens can live with it as long as it is open to change in the future.

According to The Australian, “Labor is holding firm on compensating emissions-intensive, trade-exposed industries and coal-fired power generators, and offering assistance to the coal industry”. Reports suggest
The Greens are likely to accept Labor’s push for levels of compensation for polluters modelled on the $35 billion over ten years proposed in the CPRS.

The Sydney Morning Herald reported that The Greens, “want big subsidies for renewable energy in exchange”. Reports as Solidarity went to press suggested a $2 billion a year clean energy fund might be set up. This would be used as seed capital, but business would still be required to partially fund projects.

But this was unlikely to be more than 10 per cent of carbon tax revenue. The government has said that at least 50 per cent of revenue will be spent compensating households. Under the CPRS another 35 per cent went on industry compensation. Independent MPs Tony Windsor and Rob Oakeshott also want funding for soil carbon programs to aid farmers. An ACF study earlier this year found that the federal government was spending $12 billion a year subsidising fossil fuels. Fighting to redirect even a portion of this to renewable energy would be a much better move than relying on revenue from a carbon tax.

Backing the carbon tax will be a disaster for the climate movement and The Greens. It has done more than anything else to give Abbott a chance of winning the next election. We need a climate campaign that fights for a ban on new coal power stations, for direct government investment in renewable energy and green jobs—demands that could actually win support from ordinary working class people.


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