7 reasons the carbon tax won’t work

Abbott’s campaign against the carbon tax is a campaign against climate action. He still refuses to acknowledge that climate change is human induced, and he wants to shut down the department of climate change. This is giving climate deniers a new legitimacy, and it has to be stopped. But fighting Abbott shouldn’t mean uncritically supporting the flawed carbon tax. The Gillard government and the Greens have pinned their political fortunes on getting a price on carbon, but the carbon tax is inequitable and it won’t deliver renewables. Here’s why:

1. It will not cut emissions

The carbon pricing plan is supposed to cut pollution by 5% of 2000 levels by 2020 and by 80% by 2050. The 5% target is well below what is needed, but Treasury modelling shows that the carbon price won’t even achieve this! Australia’s emissions will continue to rise until 2030 and the claimed reduction of 5% by 2020 only occurs through buying international offsets, which are to make up two thirds of the total emissions cuts.
2. It will not deliver renewables
The carbon price will start at $23 per tonne and will raise by 2.5% a year. But modelling by the group Beyond Zero Emissions shows that a price of $70-$200 is required to make wind power competitive with coal, and over $200 per tonne to make solar thermal competitive. The government’s claim that it is putting $10billion towards renewables as part of the pricing package is misleading. The commercially oriented Clean Energy Finance Corporation (CEFC) will leverage private sector financing for renewables and clean energy products. This is not direct government investment into renewables, but loans given out to make returns. It still relies on renewable energy being profitable in the energy market, but past schemes like this have seen sloar projects collapse.
3. It will not stop the expansion of coal
The government will not put a moratorium on new coal fired power stations. Rather than seeing an end to coal expansion, under the policy there will be “gains in coal which will come from the development of new mines and from the strong investment pipeline” (Wayne Swan). The government is boasting that it will negotiate the closure of around 2000 MW of highly polluting generation capacity by 2020, but powerstations such as Hazelwood – the “dirtiest” in Australia – are already years overdue for decomission. At the same time, the government has just given a $100million grant for the new HRL coal-fired power station in Victoria.
4. It will make ordinary people – and NOT big polluters – pay
The Carbon price will not make polluters pay. As Ross Garnaut explains in his latest climate report: “In the long run, households will pay almost the entire carbon price as businesses pass carbon costs through to the users of their products.” There will also be enormous compensation packages for big polluters, including the $1.3 billion “Coal Sector Jobs Package” which is not really about jobs but giving extra assistance to the multi-billion dollar coal industry. Household compensation to meet price rises reinforces the message that it will be consumers who are paying, and this money will go straight back to big business as consumers use it to pay higher electricity prices.
5. It hasn’t worked overseas
In 2015 the fixed Carbon Tax will turn into an Emissions Trading Scheme, where the carbon price will be set by the market and the number of permits issues by the government each year will be capped. But this policy has proven to be a failure around the world. A trading scheme in the European Union has been in place for over five years, and yet the permit price has crashed multiple times, amidst the continued rise in greenhouse gas emissions in these countries. The result of the scheme has not been
investment in renewables, but the emergence of new financial carbon markets for speculation and profiteering.
6. It is unjust – and gives Abbott credibility!
Abbott’s ‘people’s revolt’ against the carbon tax is pure opportunism. But the reason he is gaining so much momentum is because he plays on the very real fear people have of job losses and increased costs of living. Abbott recently blamed the 1000 job losses at BlueScope Steel on the carbon tax, even though the company said it was unrelated. The Liberals will do everything they can to link job losses and price rises with the carbon tax – and unless the climate movement starts fighting for solutions that mean a better standard of living, more jobs and a just transition for workers in polluting industry, it will only work in Abbott’s favour.
7. It will not help build the movement
The carbon tax is not a ‘small step forward’ because it undermines the possibility of building a mass climate movement – which is desperately needed to challenge vested interests and a weak-willed government. We need a movement that argues for corporate tax instead of a carbon tax, and direct government investment into base-load renewable energy. We also need to demand green jobs and a just transition for workers currently in polluting industries. A movement based on these socially just principles would win over a much broader cross-section of society than the carbon tax ever will, and do more to combat climate change than the carbon tax ever will.

WHY THE CARBON TAX WILL DELIVER GAS

For base-load electricity generation it will be gas-fired electricity that we see emerge, and for that investment to be committed, we need a carbon price in the economy. Climate Minister Greg Combet March 9th:

There’s no doubt that the next generation of electricity suppliers is also going to include a contribution or a greater contribution of baseload electricity from natural gas. It’s a cleaner energy source. Combet April 2011:

The Gillard-government is trying to sell a carbon price as historic reform to transition Australia away from polluting industry. But at best we will simply moving from one polluting industry to another. Coal seam gas is marketed by the government and the big polluters as a ‘clean energy technology’ and Climate Minister Greg Combet is giving every assurance that the coal industry will be “safe” and that the gas industry is going to allowed to massively expand. Treasury reporting shows that under the carbon tax gas-fired electricity will expand by 150-300% in the period up to 2050. This has been hailed by Treasurer Wayne Swan as proof of the carbon price’s ability to redirect investment but as Greens MP Adam Bandt said, the gas industry is “trying to destroy renewable energy by being its principle competition”.

We know that natural gas cannot provide a solution to climate change. While it is true that gas produces fewer emissions than coal when burned, it is not ‘cleaner’ when total emissions are considered. The development, processing and transport of natural gas all add significantly to emissions. Furthermore, substantial leaks of methane gas occur before combustion. Methane is a much more potent gas than carbon dioxide. Work by Professor Howarth from Cornell University in the US concluded that the emissions from coal are actually slightly less than the estimate for coal seam gas and that it would be far better to rapidly move towards an economy based on renewable fuels. Other studies have shown that on a life-cycle basis coal seam gas generates more than 40 times the amount of greenhouse gas per unit of energy generated than solar or wind.

Coal seam gas exploration and extraction is rapidly spreading across NSW and QLD. Dart Energy currently holds a petroleum exploration licence for an area covering 2385km2 of the Sydney Basin.

Community and environmentalist groups have begun fighting the industry, but many in the campaign are sidelining the question of climate change in order to maintain alliances with farmers, thoroughbred breeders, and the tourism industry. Yet with Abbott campaigning to undermine any sort of action of climate change, it is crucial that we put climate change at the forefront of this campaign. Abbott still refuses to acknowledge that climate change is human induced, and he wants to shut down the department of climate change. This is giving climate deniers a new legitimacy. We have to fight this, while at the same time pointing out that Gillard’s carbon tax is not about seriously giving renewable energy a chance.

Beyond Zero Emissions shows that Australia could transition to renewables in 10years – it is the political will, not the technology, that is missing. Direct Government investment was used to set up our current fossil fuel based energy grid and currently the government is willing to spend $43 billion on Broadband internet. We should demand that Government investment also be used to build a renewables based grid. Funding can be raised through progressive taxation, increasing super-profits tax, or through debt financing like with the bail out packages. A movement based on these socially just principles would win over a much broader cross-section of society than the carbon tax ever will, and would be far more successful in combating climate change than the carbon tax ever will be.

NO to the Carbon Tax, NO to Abbott – where to now for the climate movement?

Gillard’s carbon pricing policy will not deliver the emission cuts nor the renewable energy we need. In the fixed tax stage, the carbon price will start at $23 per tonne and will rise by 2.5% a year. Climate group Beyond Zero Emissions research estimates that a price of $200 per tonne would be required to make solar thermal competitive. Anything less than this will simply result in continued emissions and wasted investment directed towards coal and gas technologies rather than renewables. Gillard and Combet have both voiced their ongoing support and encouragement for the current massive expansion of gas, and have assured the coal industry and hence Australia’s emissions have a ‘long term future’.

Following the fixed price we will see an emissions trading scheme, the like of which have failed internationally. The EU trading scheme, in existence since 2005, has resulted not in emissions cuts but rather in new market speculation. Gillard’s carbon price is supposed to cut pollution by at least 5% of 2000 levels by 2020 and by 80% by 2050. However, Treasury modelling shows Australia’s emissions will continue to rise until 2030. The claimed reduction by 2020 only occurs through buying international offsets, which will result in no change to the source and size of Australia’s domestic greenhouse gas emissions.

The carbon pricing plan establishes the $10 billion commercially oriented Clean Energy Finance Corporation (CEFC) to “drive innovation in clean energy…through loans, loan guarantees and equity investments.” This is the further privatisation of electricity and will rely on the free market to come up with renewable funding – a dangerous idea given the market cannot produce the sufficient funds for upgrading the grid or large-scale renewables due to the high costs and low long-term returns.

A carbon price does not make the polluters pay. Instead corporations can pass the costs on through higher prices. Whilst big polluters are being compensated, the scheme will force higher costs of living onto domestic users – fuelling Abbott’s scare campaign! Any compensation to households will be spent on these higher costs of living and will not keep up with a rising price. The climate movement cannot unequivocally support such a policy only to keep Abbott out – we must demand a real solution!

Our current energy infrastructure was set up through direct government investment – the same approach should be taken to establish a renewables energy grid. We need renewable energy funding that is based on social need and not on the potential for profitable returns! The most effective strategy will be a movement based on social equity. We need a movement arguing not for consumers to pay for climate change, but for the polluters themselves to take responsibility. We must also demand green jobs to ensure a just transition for workers in Australia’s fossil fuel industries. A movement based on these socially just principles would win over a much broader cross-section of society than the carbon tax ever will, and would be far more successful in combating climate change than the carbon tax ever will be.

by Imogen Szumer

STOP CLIMATE CHANGE: STOP ABBOTT! We need renewables: not a carbon price

Abbott’s campaign against the carbon tax is a campaign against climate action. He still refuses to acknowledge that climate change is human induced, and he wants to shut down the department of climate change, sacking over 1000 staff that work there. This is giving climate deniers a new legitimacy. Many of the participants in the anti-tax convoy that recently headed to Canberra held denialist banners like “CO2 in not a pollutant”. It is up to the climate movement to build a fight that can defend real climate action.

But the carbon price policy itself is giving Abbott’s campaign traction. The Coalition is still ahead in the polls, while Labor has spent the year grappling with historically low unpopularity.The truth is that Abbott has hit a nerve by campaigning against the tax on the basis of rising costs of living and job losses. He says “The Coalition says no to a carbon tax because we say yes to manufacturing industry and yes to affordable power and transport.”

Job losses are a real worry for people. When BlueScope Steel recently announced 1000 job cuts and the closure of half of its steel-making capacity, Abbott instantly blamed the carbon tax, even though the company denied this was the reason. The Liberals will do everything they can to link job losses and price rises with the carbon tax – and unless the climate movement starts fighting for solutions that mean a better standard of living, more jobs and a just transition for workers in polluting industry, it will only work in Abbott’s favour.

The truth is the carbon price will make ordinary people, and not big polluters, pay the price for climate change. As Ross Garnaut explains in his latest climate report: “In the long run, households will pay almost the entire carbon price as businesses pass carbon costs through to the users of their products.” There will also be enormous compensation packages for big polluting companies, resulting in windfall profits.

Nor is the carbon tax going to bring serious emissions cuts or renewable energy. It is supposed to cut pollution by 5% of 2000 levels by 2020, which is well below what is needed, but Treasury modelling shows that the carbon price won’t even achieve this! Australia’s emissions will continue to rise until 2030 and the claimed reduction of 5% by 2020 only occurs through buying international offsets.

The carbon tax is not a ‘small step forward’ because it undermines the possibility of building a mass climate movement – which is desperately needed to challenge vested interests and a weak-willed government. We need a movement that demands corporate tax instead of a carbon tax, and direct government investment into base-load renewable energy sources is needed. We also need to demand green jobs and a just transition for workers currently in polluting industries. A movement based on these socially just principles would win over a much broader cross-section of society than the carbon tax ever will, and would be far more successful in combating climate change than the carbon tax ever will be.

by Erima Dall

WHOSE CARBON FOOTPRINT IS TO BLAME???

In Australia in 2009, residential emissions amounted to only 9.7% of total carbon emissions, primary industries such as mining and agriculture represented 29% and emissions from electricity, gas and water were responsible for 37% of Australia’s total (Australian Greenhouse Emissions Information System). Against this backdrop, it is surprising that a central drive in the Australian climate movement is to reduce our domestic carbon footprint, for example by switching to less emissions-intensive light bulbs and changing shower heads. Reducing individual consumption cannot be the main focus of the environment movement when most of Australia’s emissions originate from sources of production.

The government purports this idea of lifestyle changes to stop climate change through campaigns such as Earth Hour and the ‘black balloons’ campaign. Black balloons feature in the government’s ‘you have the power, save energy’ campaign, being a simple way to represent our greenhouse gas emissions. One ‘black balloon’ contains 50g of carbon pollution, and the average NSW home produces 160,000 black balloons of carbon pollution a year. The campaign is built around ways to save power and reduce the amount of black balloons released into the atmosphere from homes, for example by using an energy-efficient television or installing solar heating systems. However, whilst the domestic sector is supposed to be reducing its carbon footprint and therefore lessening the impact of climate change, the NSW government has proposed the building of two new coal fired power stations (one at Bayswater in the Hunter Valley and one at Mt Piper near Lithgow), as well as a major expansion of the existing Munmorah plant at Lake Macquarie. This would increase NSW annual greenhouse pollution by 24% and according to Greens MP John Kaye, would be the equivalent to the release of 600 billion ‘black balloons’ annually or the emissions produced from doubling the number of cars on NSW roads. This sort of hypocrisy demonstrates that whilst it is advantageous for the government to appear to be making steps towards reducing the impacts of climate change, these steps are shallow and the interests of Australia’s leaders still lie in expanding the coal industry and fuelling climate change.

The idea that we as consumers must sacrifice a certain standard of living to reduce Australia’s emissions is a fallacy; our heating and lighting could be powered by mass renewable energy. In another effort by big businesses to shift the responsibility for climate change to the consumer, we have seen the emergence of ‘green consumerism,’ or products being marketed to consumers with the promise of being earth-friendly. However many consumers cannot afford such products and furthermore they enshrine the idea that we as individuals must pay for climate change. Not only are the companies producing these items continuing to sell the variations without the ‘green stamp,’ there is no real guarantee of how these goods are produced. Greenwashing products is not stopping climate change, it is simply a niche market created to play on the sense of guilt in the consumer whilst also continuing the profiteering of polluting industries.

It is ideal for big business and coal-committed politicians if we focus on our individual consumption rather than that of industry. It also turns the movement into one in which it is more difficult to move from individual action to collective action; individuals feel like the only way they themselves can stop climate change is to implement these consumption-based changes in their homes. However if we want to progress to real action that will drastically reduce Australia’s greenhouse gas emissions, a stronger social movement is required. We need a social movement that can confront these companies and force change at the point of production, by demanding investment into real alternatives like base load solar-thermal and wind. This is where our power really lies.

by Imogen Szumer

WHAT ARE THE ALTERNATIVES TO THE CARBON TAX?

To achieve the emission reductions to avoid the worst consequences of climate change we need to construct an energy grid that can provide Australia with affordable base-load renewable energy. The construction of a renewable energy grid cannot be achieved by the market due to the high capital costs and low or long-term rate of return on such investments. Large-scale infrastructure programs to transform the energy sector require resources on a scale that only the government can provide. This has always been the case, for example most of Australia’s existing energy infrastructure was built through government spending, including the iconic Snowy Mountains Hydro-Scheme.

There are plenty of historical examples of large-scale government spending on infrastructure projects to transform the economy in positive ways. The recent stimulus packages, the $42 billion National Broadband Network or even the rapid transformation of Australia’s economy to a war footing at the outbreak of World War 2 show how the government can directly intervene into the economy when it wants to. The argument that the government ‘can’t pick winners’ is false – it does it all the time. Just recently the Gillard government announced $1.2 billion in investments into solar-gas technology (an outdated technology that will encourage the use of gas) and it continues to provide $11 billion in subsidises to the coal industry. A complete plan for the whole of the country is necessary to ensure the most efficient allocation of resources.

Planning is essential when aiming for 100% renewable energy, as a renewable energy grid requires a precise mix of different energy generation technologies and careful geographical dispersion to ensure continuity of supply. This is illustrated by the Beyond Zero Emissions Zero Carbon Australia Plan, which outlines how a transition to 100% renewable energies is possible in the next 10 years. The plan utilises an energy mix of approximately 60% baseload solar-thermal and 40% wind, with crop-residue biomass, hydro power and small-scale solar photovoltaic power to help meet demand 24/7. This sort of precision and planning does not occur in the private sector with investment being directed purely on the basis of profit, not on the overall energy needs of society. The construction would cost approx 3–3.5% of GDP a year, for the next ten years. In addition, the cost of operation, maintenance and construction decreases with each station built. After half the stations planned for Australia have been built, the costs will drop below that of a new coal-fired power plant. The plan estimates that in implementation 80 000 construction jobs would be required at its peak and a further 45 000 permanent jobs in maintenance and operation. Serious investment is required to train a renewable work force and to retrain workers in polluting industries.

The climate movement should reject the argument that the funds aren’t there for such spending to take place. The Australian governments $11 billion per year of subsidies to the coal industry should be redirected. Further funds could be raised through progressive taxation e.g. raising corporate taxation back to the 1986 level of 49 per cent would raise $40 billion a year (Gillard is reducing it even further from 30 per cent to 29 per cent), or had Labor not backed down on the mining super profits tax a further $60 billion could have been raised over the next decade. By taxing a small number of wealthy companies and individuals – investment and green jobs could be provided which benefit the whole of society.

Direct government spending into renewable energy is rarely discussed as the solution to climate change by politicians, the mainstream media or even the climate movement. The dominance of neoliberalism has seen ‘the market’ posed as the solution to any of societies problems, with climate change as no exception. This is despite the fact that climate change was described as “the greatest market failure the world has seen” and as outlined the government has consistently intervened into the ‘free market’. The ultimate barrier we face is political and not technological. Fossil fuels underpin the profitability of Australia’s economy. We need a movement that can fight to put people before profits.

by Nic Margan and Ben Dharmendra

CARBON PRICING: CAN IT DELIVER RENEWABLES?

The Gillard Government and the Greens have pinned their political fortunes on getting a price on carbon emissions. As the Multi-Party Climate Change Committee (MPCC) gets set to announce its final policy guideline, leaked reports from the negotiations, and statements by Julia Gillard and Climate Change minister Greg Combet indicate that we can expect a low carbon price of $18-23 and business compensation based on Kevin Rudd’s CPRS model, which involved $30 billion handouts to emissions-intensive industries. Clearly the Gillard government is not serious about acting on climate change. At the same time the government is talking up the carbon tax and its green credentials, it is overseeing and encouraging the expansion of coal seam gas and doing all it can to reassure the mining industry that its profits and the future of coal-fired power are secure. Repeatedly Greg Combet has stated that the government ‘remain(s) committed to assuring the competitiveness of our mining sector’, but when this competitiveness is based on dirty, cheap fossil fuels this translates to letting the polluters continue polluting.

In a Lateline interview on March the 9th Greg Combet stated that “for baseload electricity generation it will be gas-fired electricity that we see emerge, and for that investment to be committed, we need a carbon price in the economy”. Treasury reporting, which predicted the expansion of gas-fired electricity by 150-300% in the period to 2050, has been hailed by Treasurer Wayne Swan as proof of the carbon price’s ability to redirect investment.

But we don’t need gas (still a fossil fuel and emissions intensive) we need renewable energy if we are going to cut emissions to avoid catastrophic climate change! Climate group Beyond Zero Emissions estimates a price of $70-200 is required to make wind power competitive with coal, and over $200 to make solar thermal competitive. Anything less than this, and any delay in reaching this target will simply result in continued emissions and wasted investment directed towards coal and gas technologies rather than renewables. With the government and business fixated on the profitability of cheap fossil fuels, it is clear that any real action on climate change will only come through the efforts of a broad climate movement. However such a movement cannot be built on the basis of supporting inadequate and regressive pricing mechanisms. The carbon price is often said to be a mechanism to make the polluters pay for their carbon emissions. However any carbon price can be passed onto consumers through rising electricity prices. Indeed the carbon tax is designed to raise the price of goods depending on the emissions intensity of their production and hence in theory to drive demand and investments into lower emissions intensive goods. Emissions are released in the production of almost all consumable goods, which means ordinary people will be hit by higher electricity, petrol, and food prices. As a result 73% of people in a Galaxy poll believed the policy would leave them worse off. Talk of household compensation to meet price rises simply reinforces the message that it will be consumers who are paying more not big business. After all this compensation will be largely going straight back to big business as consumers use it to pay higher electricity prices.

Even if companies could not pass all the costs onto consumers, the government has not only committed to compensating businesses, but additionally the size and profitability of the mining industry will easily allow them to absorb such costs. Economic modelling by Connection research showed a $20 carbon tax would cut just 2.3% from the earnings of Australia’s 100 largest companies, including BHP Billiton, Rio Tinto and Bluescope Steel. Rather than deterring investment into fossil fuels the carbon price is already being factored into investments e.g. BHP Billiton recently announced a further $80 billion in investment into “resource development” over the next 5 years. The argument that the climate movement should defend the tax and then later fight for improvements in the policy fails to consider that the current support for the tax is detrimental to building the climate movement now and in the future. The momentum behind Tony Abbott and his climate skepticism is not because Labor and the climate movement can’t sell the policy, it is the policy itself! Support for the carbon tax re-enforces the perception that a solution to climate change requires a sacrifice in living standards. This undermines our ability to gain support for climate action in the wider community. Already polls indicate that support for action on climate change is declining – one Lowy Institute poll found a 27% fall in people who saw climate change as a serious and pressing issue since 2007. Though the Liberals have no serious alternative to the carbon price, the same party that brought Australia the GST and WorkChoices has been able to position themselves as the defender of working families and living standards.

Ultimately it is impossible to build a wide-spread climate movement through supporting policy that entrenches social inequality. Especially when such a policy will not deliver the emission cuts we need – already in a recent report by the Department of Climate Change emissions are predicted to rise by 24 per cent by 2020. As if the tax wasn’t bad enough, the Gillard Government plans to later implement a carbon trading scheme such as the one that has been in place in the EU since 2005. In 2010 the Australian reported that “Concern that used and worthless permits were circulating caused the spot price of the certificates to collapse, from E12 ($17.80) per tonne of carbon to less than E1.” This was not the first time the price of the permits had plummeted. The result has not been investment in renewable technologies, but the emergence of new financial carbon markets for speculation and profiteering. A recent Lowy Institute poll found 39% of people are not prepared to pay anything to combat climate change and they don’t have to. Greater sums of money can be raised through progressive taxation and from the super-profits that continue to be reaped by polluting companies as they destroy the planet, e.g. BHP Billiton’s record interim net profit of $10.52 billion in 2010. All this and more could be directed towards expanding renewables in a similar way to how the government funded our current fossil fuel based energy grid. The severity of the climate crisis we face calls for the need of direct government investment into renewable energies, the expansion of renewables based public transport and the planned phasing out of coal-fired power and fossil fuel usage. Only through these measures can we achieve the necessary cuts in emissions in the short time-frame we have. The demand for government investment into renewables and the creation of green jobs to ensure a just transition is a far stronger basis on which the climate movement can grow and gain support.

by Neil Robertson and Eliot Hoving

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