Ethics beats self-interest in carbon tax debate

Polluting our atmosphere shouldn’t be free, for ethical reasons as well as economics. AAP

The failure to adequately price carbon emissions allows the world’s affluent to impose serious climate-related costs upon its poor. But is this primarily an economic or an ethical issue?

Despite fierce opposition to the government’s proposed carbon tax, policy experts rightly insist that creating a price for carbon is a necessary first step in reducing human contributions toward climate change.

At present, polluters are free to use the planet’s atmosphere as a repository for carbon emissions. And the absence of any price on pollution leads directly to its overproduction. Yet climate change is expected to impose significant costs upon those affected by it.

Broadly speaking, there are two ways we can look at the cost of climate change: one economic and the other ethical. The very concept of ‘cost’ invites the economic approach. It suggests that the failure to account for the costs of pollution when pricing it will lead to overproduction. This undermines market efficiency.

Many leading arguments for stronger policy action on climate change, including the Garnaut Review in Australia and the Stern Review in Britain, rely upon an economic perspective. This views climate change as a case of market failure and urges action, but only when it is cheaper than inaction.

Such cost-benefit analysis is controversial in the context of climate change. There are uncertainties in, and consequently widely disparate estimates for, the costs and benefits of any level of commitment. There are further difficulties associated with comparing future costs and benefits against present ones.

In light of such difficulties, the advantages of an ethical approach to action on climate change become clear.

When we use ethics to analyse climate change, our focus changes. Our goal becomes to avoid causing harm to the innocent where possible and to compensate them for that harm when it is not. If we do this, we no longer need to rely on controversial forecasting models.

So long as it can be shown that many people will be seriously harmed by climate change unless those now responsible for it significantly reduce their carbon emissions—a prediction that only the most disingenuous of climate sceptics could deny—the challenges of an economic approach can be readily overcome.

The ethical approach says we should act on climate change now, not because the future costs of inaction exceed those of mitigation, but because the failure to do so harms others. It is our ethical duty to avoid this.

The ethical approach likewise invokes different and less contentious considerations in assessing how much action we take. In the climate debate, targets are expressed in terms of atmospheric concentrations of carbon dioxide or global temperature increases. Moral philosophy is much more consistently supportive of ambitious targets because economics relies on noisier data and more contestable assumptions.

Given the ethical approach’s injunction against harming others, it aims for the lowest feasible targets. It refuses to define what is ‘feasible’ in terms of the balance of costs and benefits. Harm to innocent victims must be avoided, even when the cost of reducing pollution exceeds the cost of suffering for polluters.

Ethics acknowledges that climate-related harm is more likely to affect the poor, not those who are now being asked to contribute toward its mitigation.

Perhaps most implausible for observers of the carbon tax debate is that the textbook economic approach to taxing pollution is indifferent to how the proceeds of that tax are used.

As Labor has aptly noted, the potential benefits of a carbon tax include how its revenues might fund progressive efforts. This includes compensating the vulnerable in the face of price rises and developing sustainable energy and transport systems that reduce our reliance upon carbon.

Although economics may be the dominant theme in public policy, ethical concerns such as these appeal to common sense. The inability of economic analyses to accommodate them strikes many as counterintuitive, even offensive.

The ethical approach should appeal to the Gillard government, which has so far relied primarily upon the Garnaut Review’s economic analysis to sell its carbon tax proposal to a resistant public.

The government has shown that it’s sympathetic to several issues that require ethical rather than strictly economic analysis. Its focus upon the ways we can distribute a carbon tax is a good start.

Paying similar attention to how the effects of unmitigated climate change will be distributed is the next step.

This resonates with majorities, who think climate change is an important domestic and foreign policy priority. And focusing on the ethical case for climate change action could portray Australia in a more positive light internationally.

Showing concern for our ethical obligations as one of the world’s leading per capita carbon polluters, rather than appearing to be concerned only with our economic interests, will improve our image. This will lend Australia moral authority, and with it greater opportunities for climate policy leadership.