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Saturday, February 21, 2009

Climate Change is about more than the mechanism

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Climate Change is about more than the mechanism
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Climate Change is about more than the mechanism
Blog Post Blog of Christine Milne
Friday 20th February 2009, 4:06pm
by ChristineMilne in


After a year of rushing headlong into an ill-thought out emissions
trading scheme, the global financial meltdown has given Australia
pause for thought in how we deal with the climate meltdown.

Thus far, however, we are still having the wrong debate. With crunch
time on the emissions trading legislation fast approaching, we are
bickering over the right mechanism to use when, fundamentally, our
entire attitude must change.

Think of it on a personal level. The contestants on Australia's
Biggest Loser aren't going to win the competition and get healthy
lives back by setting themselves a meagre weight loss target and then
arguing between Atkins and Weight Watchers to achieve it. They will
only succeed if they make a determined commitment to themselves to
rebuild a healthy body, changing their whole attitude and lifestyle to
achieve that vital and realistic goal.

Instead of fighting over how little we can get away with cutting our
emissions, we need to commit to doing whatever it takes to deliver a
safe climate to our children. Instead of asking whether taxing or
trading carbon is better for achieving incremental emissions cuts, we
need to get moving fast on total decarbonisation of the economy. Until
we accept that challenge, the policy debate is largely a distraction.
Once we change our attitude, either mechanism can succeed.

The carbon tax versus emissions trading argument is a hoary old
chestnut that divides experts and non-experts the world over. Both
sides have strong arguments in their favour and both have their
drawbacks. The Australian Greens tend to support emissions trading
because trading guarantees a particular environmental outcome and lets
the market decide the price, whereas a tax sets the price and lets the
market decide the environmental outcome. Given that Lord Stern warned
us three years ago that climate change is the world's biggest market
failure, we would rather be guided by a definite climate outcome than
by the whims of the market.

Critics of emissions trading point to the mess the Rudd Government has
made of its proposed Carbon Pollution Reduction Scheme and argue that
a carbon tax would be simpler and therefore preferable, even if it
does not guarantee a specific carbon reduction and therefore climate

But the view that a tax is inherently simple can only be held by those
who have not been paying attention to what the Rudd Government has
been doing. At the urging of the big polluters, Ministers Wong and
Ferguson have bravely created complexities where no-one could have
imagined it possible, with the latest example being the ridiculously
complicated arrangements now being discussed for trade exposed
polluters to qualify for compensation.

If the Government has made such a mess of emissions trading, what
guarantee is there that they would not do the same with a carbon tax?
The moment the choice of a carbon tax is taken, you can bet that the
big polluters would be walking corridors and knocking on doors making
sure it is as weak and full of loopholes as possible. There is every
chance that the inherent simplicity of a tax would be muddied beyond
recognition by convoluted and intricate arrangements for compensation,
offsets and rebates, muting the price signal and undermining the
purpose of the exercise just as has happened with the CPRS. If the
level of the tax is geared towards the CPRS's pitifully weak 5%
emission cuts, very little will be achieved even if voluntary action
is counted.

There are signs that the Government is beginning to recognise what the
Greens have long said - that there is an abundance of cheap and easy
emissions reductions out there for the taking in an economy as energy
inefficient as our own. The first steps being taken towards home
energy efficiency in the recent stimulus package, and the rumours that
a big commercial efficiency push is coming, are positive signs. But,
with the current scheme design, they will only make it cheaper for
polluters to meet their weak obligations instead of being a reason to
aim for a stronger target.

The Government will convince no-one with their claims that the CPRS is
about transforming the economy when it is clear as day that its design
is geared to protecting existing industries at all costs. The policy
needs very significant work to make it both environmentally and
economically effective.

The Greens have been thinking about and working on these issues for
many years. We have a wealth of experience and expertise on how best
to design effective policies, garnered from best practice from around
the world, in successful economies such as Germany and California.

Our door is always open. The Government must recognise now that while
quick arrangements could be made in order to pass the stimulus
package, rushing through a deeply flawed CPRS will not be acceptable.



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