Maintaining the commons

Attacks on the constitutionality of the carbon tax reinforce the need for complementary policies

Redundant policy or redundant technology? Stephen Richards

In an effort to encourage the States to challenge the Federal government’s Clean Energy Future Policy (CEFP), a conservative think tank – the Institute of Public Affairs (IPA) – recently commissioned a legal opinion on the constitutionality of the carbon tax. It concludes that the carbon tax is unconstitutional because carbon dioxide emissions are, from a legal perspective, state property and the federal government can’t tax state property.

This follows an earlier claim by mining-magnate Clive Palmer that he would challenge the carbon tax on constitutional grounds and the IPA itself has strong links to the mining industry, the Liberal party, and other conservative think tanks around the world such as the American Enterprise Institute.

The left-leaning activist group GetUp downplays the constitutionality claims as a “meaningless stunt” and it is hard to believe that any State government would follow through with a challenge. If successful, the States would then be liable for any damage their carbon emission “property” causes in the future. To date, at least, no state government has responded.

However, the argument reinforces the need for multiple complementary or alternative policies to support the CEFP and such policies are being scaled back around the country.

In recent weeks we have seen the Victorian Baillieu government break an election promise which would have introduced greenhouse gas limits on new coal-fired power plants and scrap the State’s goal of reducing greenhouse gas emissions by 20% by 2020. The NSW O’Farrell government has also announced an end to their Greenhouse Gas Reduction Scheme upon commencement of the federal policy.

This follows an earlier call by the Federal Climate Change Minister, Greg Combet, for the States to review “inefficient” climate change schemes, such as solar feed-in tariffs, and the WA Premier, Colin Barnett, and Business Council of Australia have called for an end to renewable energy targets.

The argument made is that such complementary or alternative policies are redundant once the CEFP commences. However, Paul Twomey and I argue in The Conversation that multiple instruments can be justified. One such justification is that multiple instruments reduce the risk of governments dropping the ball on climate change issues in the future. That is, multiple policy instruments provide resilience, an important side-effect even if redundancy does exist.

The constitutionality argument reinforces the need for resilience because it highlights that industry bodies, corporations and think-tanks supported by industry can use their power through the means of persuasion and disinformation to manipulate environmental policy.

Such use of power led to large concessions for the emission-intensive, trade-exposed industries in the CEFP. It could also lead to the abandonment of the carbon tax if the constitutionality argument succeeds or if a future Abbott government follows through on its threat to repeal the CEFP upon taking office. This would leave us without any Federal or State greenhouse gas policy at all.

Whether or not the alternative and complementary State and Federal policies are redundant, they add to the resilience of greenhouse gas policy and should be maintained.