The carbon tax and the ‘climate overboard affair’

When we debate a carbon tax, how much thought are we giving to our fragile, drought-prone continent? Raiden256/Flickr

As the old saying goes, “the road to Hell is paved with good intentions”. On Sunday, the exhausting, almost decade-long battle to put a price on carbon pollution enters a new phase, when the MultiParty Climate Committee formally releases its recommendations for a carbon tax.

With the Greens in control of the Senate, the tax is likely to pass into law later this year and be in place by mid-2012, on track to an emissions trading scheme by 2015. This first step is, without a doubt, welcome and long-overdue.

At only $23 per tonne of carbon dioxide, the tax still sends a powerful signal for industry to anticipate further price increases and plan accordingly.

It may encourage initial action to reduce emissions by up to 90 million tonnes per annum – about 15% of our national total. But the low price isn’t a sufficient incentive for new investment in cleaner energy, which only becomes competitive at $40 or more.

Moreover, when one looks at studies of the cost curve for investment in carbon-saving technologies and practices, for instance in reports by McKinsey and ClimateWorks, it is clear that there are currently significant savings in emissions and costs to be found through energy efficiency measures which aren’t being “captured”.

At least 70 million tonnes of carbon dioxide (equivalent) in emissions – another 12% of our national total - could be saved now. There could be savings of up to $100/tonne in the gas and petroleum industries.

Many of these savings in costs and emissions have been there for years. Yet industrial practices are so entrenched - or profits so good - that the companies concerned have failed to grab this low-hanging fruit.

So a modest increase in energy costs is unlikely, by itself, to change behaviour. As overseas experience shows, regulations and other complementary measures are required. The promised new agency to help ramp up investment in renewables will be a welcome, indeed necessary, addition.

What has been lost in this tussle over a tax that will affect few people initially? In all the bluster, one could almost forget what the fuss has really been about. The carbon tax debate has become the “climate overboard affair”.

The real and present dangers and looming threats of global warming – the reason for all this fuss – have rarely been mentioned in the tussle over immediate costs and impacts. No longer the “moral issue of our time”, Australia’s climate debate has fallen back into the narrow, economistic and short-term frame that John Howard set for it in 1997.

But when we step back from the gruelling duel over the tax between Abbott and Gillard and look at what climate science is telling us is needed, then another picture emerges altogether.

Next Tuesday, at Melbourne University, international and Australian climate experts will meet at the conference “Four degrees or more?”, to discuss what Australia might look like in a “four degree world”. For that is where we seem to be heading.

Public policy is a goal-oriented activity. It has explicit goals but also often unintended consequences. At Copenhagen and then Cancun, the international community agreed that average global warming should be kept below 2 degrees Celsius above preindustrial levels. This is the collective policy aspiration or goal. But the unintended consequences – or the hidden real “goals” – of climate policy are otherwise.

Yet if the collective voluntary pledges agreed at Copenhagen and Cancun are implemented, they will lead to global average warming of up to 4 degrees by the end of this century and between 6 and 8 degrees in the centuries to follow. The planetary consequences for ecosystems and species – and for human civilization – would be devastating.

Speakers at the conference include Professor Hans Joachim Schellnhuber, Chair of the German Scientific Advisory Council, advisor to the German Chancellor Angela Merkel and Director of the Potsdam Institute for Climate Impact Research (PIK).

In March 2009, Schellnhuber told the Copenhagen science conference that in a “four degree world” the planet’s “carrying capacity estimates (for humans, are) below one billion people.” The world would be transformed into a place hostile beyond the experience and capabilities for survival of most people of most nations.

Other notable contributors – including Ross Garnaut, Ove Hoegh Guldberg, Mark Howden and Tony McMichael – picture a bleak future for an Australia at four degrees. Even before four degrees, iconic and economically important sites like the Great Barrier Reef would be destroyed by warming, rising and more acidic oceans.

Decline in rainfall, warming, and increases in the frequency and intensity of extreme events, would cause Australian farm production to contract to the point where domestic food security may be a problem. Certain lethal diseases would become more widespread. This is the world of climate policy failure that the carbon tax debate does not address.

The Climate Commission has rightly called this the Critical Decade. By 2020, depending on national and collective global levels of ambition, we will either ensure global emissions peak and start to decline radically, or we begin to track inexorably over the 2 degree tripwire, where unpredictable tipping points, like the melting of polar ice shelves begin.

Climate policy in Australia is currently aimed at achieving an unconditional target of -5% below 2000 levels of emissions by 2020. It is to this target, and Australia’s contribution to a global effort to cut emissions, that we must look to see whether the current debate over pricing carbon – and Abbott’s unfunded and ineffective alternative program – makes much sense.

Despite Australia being the world’s 10th biggest aggregate emitter, and with the world’s highest per capita emissions, our effort to cut emissions is one of the weakest among all industrialised and major industrializing nations. We are setting an example that says to others, “It is ok to go slow”.

The carbon price – which will remain at its proposed low level until 2015 – is calibrated and framed by this modest target, one which Abbott’s proposals cannot even reach.

Our effort, measured against that of other comparably wealthy industrialised countries like the United Kingdom (which has already cut emissions by 23% and aims to halve them against its 1990 levels by 2025) and Germany (-40% below 1990 by 2020) or even China and Brazil, is neither fair nor equal to our contribution to the global problem.

In this larger context, the real price of our carbon tax will be paid for by our children and countless future generations. The huge social, economic and environmental cost, in particular in our ecologically fragile, drought and flood prone continent, is being ignored.

By failing to move faster on emissions reduction, by choosing to have such a slow start-up, this is the unintended choice we may be making.