Monday, May 09, 2011

Australia and the carbon tax

Tomorrow is budget day, the day in which the federal treasurer announces all the revenue raising and spending plans for the next fiscal year. One of the expectations for this year is the introduction of a carbon tax, which is being touted as the next best thing after the government failed to get an emissions trading scheme running about two years ago.

Australia is in an interesting position, ith regards to carbon dioxide pollution and climate change. The 21 million residents of this country are sitting on about 76 billion tons of coal. If burned and kept in the atmosphere, that is enough carbon to increase the worldwide atmospheric carbon dioxide concentrations by about 10%, or 35 ppm.

Much of Australia’s food production areas are notoriously marginal, and both floods and drought can be devastating. So climate change could potentially do severe damage to both the agricultural sector, and many urban centers, in the form of bushfire, cyclones, flash floods, and other natural disasters.

On the other hand, at a ball-park price of $100 per ton, those 76 billion tons of coal are worth over 7 trillion dollars, assuming you can dig the lot up for free. But that isn’t a simple $300,000 per person. Both the coal reserves and the mining profits are distributed rather unequally at present.

About a quarter of this coal is used for producing electricity here in Australia, or for heavy industry like steelmaking. The rest is exported, mostly to Asian countries which are not bound by the Kyoto protocol. But even excluding the coal (and natural gas) exports, on domestic consumption alone Australians are among the most greenhouse intensive people on the planet.

However, despite the prevalence of coal, there are also amble supplies of sunshine, wind, uranium, geothermal, and natural gas here in Australia. So this is not a resource poor country.

As a result, there is huge scope for intelligent, detailed, and creative debate about how Australia should manage its climate exposure, greenhouse gas emissions, and other resources to maximize the benefit to our country. Simply finding the best way to do this is a broad enough topic to have many contrasting views and informed arguments. So it is really a shame that no such intelligent conversation has ever been had.

Instead, we have labor governments putting together packages in back-door deals and then trying to sell them with condescending slogans. And on the other side of politics, there is nothing but denial and obstructionism to even considering the questions. And the greens just want to freeze us all in the dark.

The result is that nobody has any idea what the released plan is, most people are sick of the wrangling and the issue, and despite endless posturing over the subject, Australians aren’t that much more knowledgeable about their energy situation. The only tyhing we can be sure of is that key industry groups and factions will have been taken care of, presumably at our expense.


Chris Phoenix said...

Good policy requires good information.

Free-market corporations: Reliable info flow from consumers (prices); inadequate info flow to consumers (concealment, deception, PR, all corporate-controlled).

Leaders: A very good leader can have good communication in both directions. Unwillingness to hear criticism, or desire to deceive the public, frequently cause major problems.

Bureaucrats: Mediocre communication in both directions, but usually not distorted, except when bureaucrats are controlled by corps or leaders.

Sounds like you're saying that corporations control the information flow, leadership is lacking, and ordinary bureaucracy (lawmaking) is unlikely to fill the gap.

C W Magee said...

No, I think the main problem is they they are trying to micromanage the deal so that 51% of the population does better off under it. Or, more likely, that key swing demographics and/or fundraising groups are better off.

There is no indication of them setting up a system under which carbon-reducing action by any motivated and creative person or group pays off.