Labor prepares another worse than nothing carbon price

Julia Gillard has promised to deliver a carbon price by the end of 2011, saying that there will be “nowhere to hide” from climate change. But Labor is shaping up to deliver a policy much like Rudd’s worse than useless emissions trading scheme, the CPRS.

During the same speech, Gillard declared that Labor would unconditionally stick to their pathetic emissions reduction target of 5 per cent in designing the new carbon price. And Labor has been quick to reassure business that the new legislation will include plenty of compensation for them.
Treasurer Wayne Swan said that the $35 billion dollars in compensation that was to go to polluting industries under the CPRS is Labor’s model.

Swan’s comments were made at the “business roundtable” meeting of 19 chief executives from polluting industries, including mining giants Rio Tinto and BHP Billiton, Qantas and BlueScope steel.
All but one expressed their support for a carbon price, and they are lobbying ferociously for one that will allow them to continue with business-as-usual.Labor has declared it is anticipating similar compensation for big polluters with its carbon price as under the CPRS

Australian Industry Group chief executive, Heather Ridout, has warned the government to make sure the carbon price suits business interests: “[the government needs to] be extremely careful about the cost impacts on business when the rest of the world is moving more slowly on this issue and trade-exposed industries are already under a lot of pressure because of the strength of the dollar.”

Investment certainty?
The push to quickly introduce a carbon price is less about the urgency of climate change than concern about the investment climate for private energy companies.

The Australian reported in October that, “Treasury’s ‘red book’ brief [of economic advice] to the government warns that further delays to a carbon price would be ‘more costly and disruptive’ and would increase uncertainty over investment in new power stations.”

Business wants the “certainty” of a carbon price that does not challenge their interests and allows them to go on polluting.

Getting a weak carbon price passed quickly will reduce the likelihood of stronger legislation that will actually punish their polluting practices in the future. Last year, Greg Combet told a business forum that the alternative to the CPRS was “direct regulation”.

Bans on coal-fired power stations and government investment in renewable energy is exactly what industry doesn’t want. They want a “solution” that will enable them to continue polluting and expanding—and they think a carbon price can deliver that.

Gillard has confirmed Labor’s commitment to a flawed market solution, writing in The Age, “A carbon price is the only prudent answer because it unlocks one of the most powerful forces on earth—the genius of the free market.”

She has even declared that business should look for ways to “make a buck” out of the carbon price.

Labor sees introducing a carbon price as another way to win back Greens voters—since a carbon price is, wrongly, seen by many as a progressive policy. It hopes to use the carbon price committee it has established to pressure The Greens into passing whatever policy emerges. Otherwise Labor will try to wedge The Greens as blocking the chance to begin acting on climate change.

In the meeting of the carbon price committee in late November, Labor pushed for the “principles” to guide the committee’s work to include the need to compensate the electricity sector—a move The Greens opposed.

Senator Christine Milne’s promise that The Greens would not accept “rentseekers” demanding compensation through industry lobbying and “backroom deals”, like the big polluters extracted from Rudd’s CPRS, was encouraging.

But The Greens should never have allowed themselves to be lured into the carbon price committee. No serious climate policy is going to come out of this process.

Negotiating with Labor to produce a carbon price on their terms was always going to produce something like the CPRS and take the focus away from real solutions—like government investment in solar thermal and wind power stations.

Adam Bandt, the Greens federal MP, has repeatedly made the point that climate change “is not an issue with which one can play the usual kind of political negotiation”.

Referring to the massive bank bailouts in the United States and Europe, he said “let us extend to the planet the same courtesy as we have to the banks.”

But a carbon price is more of a bailout for the polluters than it is for the planet. It’s time to fight for something better.

The Beyond Zero Emissions plan outlines what a bailout for the planet could look like. Climate activists in Melbourne are already pushing unions to adopt the plan and begin the fight for green jobs, not a carbon price.

By Amy Thomas


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