The Carbon Pricing Debate — A Battle for Australia’s Soul

BY BEN HABIB.

In the past fortnight, Australian political discourse has been dominated by the debate over the pricing of carbon.  The Prime Minister’s announcement of a draft carbon pricing policy with the Greens and the independent members has sparked off a vicious volley of hyperbole from those who would object to carbon pricing.  The electorate has vacillated somewhere between cautious and hostile on the policy announcement.  The ALP has not helped its cause with four years in government characterised by inaction, hot air and spin.  We sit now poised at the beginning of a debate over a great systemic reform that will shape our nation for years to come.  In many ways, this debate is a battle for Australia’s soul.

A Strange Debate

Both major parties have adopted disingenuous positions on carbon pricing.  Much has been made in the popular media of Julia Gillard breaking an election promise not to introduce a carbon tax.  I hate to spoil the party, but governments of all stripes regularly break election promises; it’s part and parcel of the unrealistic commitment auction that characterises every election campaign.  In this case, however, this ‘broken promise’ is actually an acknowledgement of a real problem that needs to be addressed.  Rather than running from a commitment, the ALP is finally stepping up to make one.  The conservatives will raise hell about this broken promise, but it is music to the ears of left-leaning voters that have bled away from the ALP toward the Greens.

Any wounds the ALP sustains over the ‘broken promise’ are self-inflicted.  Labor put themselves in this position by abandoning their commitment to climate action this time last year in the death throes of Kevin Rudd’s prime ministership.  It was a foolish position to take on a policy issue of such gravity.

In terms of policy, we have a delicious ideological irony in that the ALP is spruiking a market-based emissions trading system (albeit with an interim set carbon price), while the key plank of Coalition’s ‘Direct Action Plan’ features large government handouts to companies who can demonstrate emissions efficiency savings.  Who would have thought fifty years ago that one day Labor would have embraced the key tenets of economic liberalism at the same time as the Coalition dances with the ghost of Karl Marx!

To top it off, none of the commitments made by the major parties to date even come close to what is necessary to achieve the emissions reductions mandated by the scientific evidence.  Once the smoke of self-interested hyperbole clears, it is the emissions reduction target that really counts.

The Bottom Line: Nature Doesn’t Negotiate

All the protagonists must not forget that the baseline for this debate is not the malleability of the political process or the economics of policy choices, but rather the tolerance level of the Earth’s atmosphere and biosphere for human interference in its chemical composition through greenhouse gas emissions.  Natural systems are governed by processes dictated by the laws of physics and chemistry.  These natural laws are not amenable to the vagaries of human political economy.

The relationship between environment, society and economy.

There is no triple bottom line.  The ecological, economic and social pillars of our society are not equal.  In fact, the economy is a social construct of human societies, which are themselves dependent on the ecological systems in which they are located for sustenance, resources and waste disposal.  To put it another way, wealth is created in human societies by the exploitation of resources from the natural environment.  If the natural environment is degraded such that those resources are poisoned or become unavailable, then no wealth can be created.

Carbon price objectors and climate deniers espouse positions that are essentially tricks of alchemy.  Their positions assume either that wealth creation is not connected with the natural world, or that the resource stocks and pollution sinks of the ecosystems in which we live are infinite.  On a finite planet, both positions are ludicrous.

The plain truth is that the overwhelming scientific evidence is pointing to a catastrophic threat to our planet and the human civilisations which live on it, a catastrophe that is already underway.  These are the new baseline conditions in which human societies and their economies will operate.  A carbon pricing mechanism is a method of a) lessening the severity of, and b) adapting our society and economy to these new conditions.  The objector/denier positions are maladaptive responses (or lack thereof) to the new ecological baseline.

Time for Honesty: This is a Negative-sum Game

The point of a carbon pricing mechanism is to increase the incentive for polluting industries to be more energy efficient and therefore less carbon intensive.  If the government compensates polluting industries for this price rise, it will distort the intended carbon pricing market signal and remove the incentive for efficiency.  These industries will inevitably pass on the added carbon price to consumers, which is why it is important that revenue from the carbon price be re-distributed to those people and families at the bottom of the socio-economic ladder most exposed to cost of living increases.

Let’s be brutally honest though.  That compensation will be cancelled out by the direct (insurance, personal disaster recovery) and indirect costs (taxes, levies) of paying for the reconstruction after natural disasters.  These costs will continue to rise as we confront inevitable climate change impacts, but they will rise far further if we do not make carbon mitigation happen in short order.

The consecutive natural disasters of last 12 months have been instructive in this regard.  Remember, climate science tells us that extreme events are becoming more frequent and more severe.  Governments can usually absorb the impact of one large-scale disaster event.  However, when they occur consecutively, as they have in Australia over the summer with the floods across the eastern side of the continent along with Cyclone Yasi, governments need to rustle up more money from somewhere else.  That ‘somewhere else’ is the taxpayer, and we’ve seen evidence of this in the Gillard government’s proposal for a levy to pay for flood reconstruction in Queensland.

We are all going to pay for climate change-related damage.  The weaker we make our carbon pricing mechanism, the less effective our greenhouse gas mitigation efforts will be and the greater in turn will be the financial burden of disaster recovery.  Indeed, every country in the world is facing this equation.

The blunt fact is that there is not going to be any win-win outcome for anyone.  Whatever happens, there is going to be a net cost.  The strength and robustness of the carbon pricing mechanism will determine how big that net cost is going to be.  While our political leaders may be trapped in the rhetoric of perpetual growth, in the longer run they are doing the public a great disservice in their dishonesty about this fundamental point.

The fact that such dishonesty is necessary is a harsh indictment on the social awareness, the critical thinking capacities, and the material greed of the Australian people.  There are many reasons why we have come to this point, as I have explored in my previous posting Making Climate Action Happen, Part I: The Plague of Manufactured Consciousness.  The unfortunate irony is that multiple global problems, of which climate change is one, have arrived at the very moment when the Australian public is least intellectually equipped to deal with them constructively.  This is a problem for any government attempting to sell a carbon pricing policy.

What’s the Objection? It’s All About Perspective

Social cleavages clearly have relevance to a debate over a systemic economic reform as big as pricing carbon.  So let us explore now the differing perspectives of those who object to a carbon pricing mechanism.

According to the proposal introduced this week by Climate Change Minister Greg Combet, it is the companies who are big greenhouse polluters who will be targeted by the carbon price mechanism.  The men (and occasionally the odd woman) who run companies in high polluting sectors have been educated to believe that the profit motive supersedes all other considerations and that the public interest is advanced when companies are allowed to maximise their economic welfare.  Serving the public interest thus does not require the visible hand of government intervention.  Rather, they believe the government should stand back and let the market economy function according to the logic of the profit motive.  This is their ideological objection to carbon pricing.

Their economic objection, again, relates to the profit motive.  They argue that a carbon price will erode profits and therefore dividends to their shareholders, and that they will be at an unfair disadvantage to companies overseas operating without the constraint of a carbon price.  This is an interesting argument, given that many of these companies are the multinationals who run these operations abroad.

They also view, rightly, that a carbon price may signal the beginning of the end for their industries.  After all, many climate scientists have argued that the coal industry, for example, has to be wound down if we are to have any chance of realistically meeting the greenhouse gas mitigation targets mandated by the scientific evidence.  It is in this context that we may see alliances of convenience form between high polluting companies and the unions who represent workers in those sectors.  Indeed, a negative union response to the carbon price mechanism is potentially destabilising for the ALP.

What about individual families and people from the working classes?  The objection here is a very practical one.  People in this group are rightly concerned about cost of living pressures, with many living day-to-day under financial stress.  As one would expect, they are sensitive to any potential rise in their living costs that could add to this stress.  It is these people that Climate Change Minister Greg Combet has indicated will receive compensation for any carbon price-related costs passed down the retail chain by the big polluters.

As we know, it is people at the lower end of the socio-economic spectrum that are least resilient to economic and environmental shocks.  The problem for this group is, cost of living pressures are increasing anyway due to rising energy (related to the global oil price as well as local electricity infrastructure constraints) and food prices (linked to the rising oil price, as well as rising demand, land degradation, market speculation and climate change impacts world wide).  In the context of rising cost of living pressures, the government will find this group hard to win over.

Next, we come to the middle class, overwhelmingly the largest and most diverse class conglomeration in Australian society.  The middle class in any society tend to be a conservative group.  As members of the technocracy they are rewarded with a small slice of luxury which they tend to guard jealously.  Yet their grip on the perch of luxury is tenuous, with many having achieved their lifestyle comforts through high and unsustainable levels of debt.  In spite of this illusion, they don’t like having their ‘entitlements’ clawed back and they don’t like being told that their way of life is flawed: “you can’t tell me what to do, I have a right to my SUV and my jet ski.”  The implicit austerity message of the carbon price mechanism is precisely the kind of admission that the carbon pricing debate and the climate change phenomenon more broadly are forcing upon them.  I should know, I’m part of this group.

There is a common thread running through all of these positions, at the level of assumptions and worldviews.  Those who reject the need to price carbon also tend to privilege economic considerations above environmental protection.  If we dig a little deeper, we find assumptions like these: humans exist separate from the natural environment, that the natural world can be tamed by humans and that Earth exists for human exploitation.  You’ll also find an assumption that the Earth’s resource base can be exploited indefinitely to supply this material luxury, with the help of science, technology and the free market.  All of these assumptions are hubristic rubbish, a testament to human arrogance and ignorance as to how natural systems work.

The Dangers of Fear Politics in the Context of the Climate Emergency

Nonetheless, it is easy to spook people who hold these views when they are confronted dissonant information like climate change.  Since the beginning of the 2010 federal election campaign, the politics of this country have been particularly ugly, even by the grubby standards of ordinary political discourse.  The Coalition in particular have been forthright in their demonization of various social groups, be they asylum seekers, Muslims, environmentalists or the gay and lesbian community.  They adopt these Machiavellian tactics because there is clearly a short term political benefit in appealing to the base prejudices of Australian voters.

However there is no action without consequence.  Australian society is complex and diverse, characterised by many cross-cutting ethnic, economic, social and cultural cleavages which, when activated by fear politics, can divide the community.  We’ve seen what happens when fear politics breathes life into prejudice and hatred in the shape Pauline Hanson and the Cronulla riots.

Let’s put this in the context of the many overlapping global problems we are experiencing in the age of consequences: climate change, peak oil and rising energy prices, food insecurity and rising food prices, the global financial and sovereign debt crises.  These problems are increasingly placing members of our community under acute stress, a phenomenon that is only going to get worse over time. History tells us that in such times, people under pressure tend to look for scapegoats, blaming demonised social groups for their hardships.  Tony Abbott and company are playing with fire.  Playing fear politics in the context of the age of consequences is like lighting a match in a petrol factory.

Rioting for Austerity

The carbon price objectors and their affiliated climate denier cheerleaders are fighting to preserve a way of life.  They will scream, kick, scratch and resort to all kinds of dirty tactics to defend that way of life.  Those who favour climate change action are advocating for a new way of life, a world which is only just starting to take shape.  In these kinds of debates, those defending something have a huge advantage over those advocating something new.  The defenders can use fear as a powerful weapon to spook those considering change.  Indeed, their commitment to their cause is a level above that demonstrated by climate activists.

In his 2006 book entitled Heat: How to Stop the Planet from Burning, British writer George Monbiot suggested that people in developed societies would not “riot for austerity”.  Ross Garnaut has also stated that climate mitigation policy cannot ask people to sacrifice their standard of living, because they will refuse.

Yet a growing number of people are doing just that, choosing to live more simply because the futility of trying to maintain perpetual growth on a finite planet is obvious to them.  And as the local author’s of  the Border Mail’s weekly Living Lightly column demonstrate, the people are discovering a physically, emotionally and spiritually more fulfilling lifestyle in the process.

These new environmentally-conscious lifestyles are potent ammunition against the fear-mongering of the carbon price objectors and climate deniers.  At this crucial stage, carbon-conscious living must incorporate political activism to confront the objector/denier cabal.  If we don’t “riot for austerity” right now, we risk ceding

The Battle for Australia’s Soul

It is no understatement to say that the carbon pricing debate is rapidly developing into a battle for Australia’s soul.  If fear politics is allowed to triumph in this debate, Australia’s greenhouse gas reduction effort will be stalled for many years, years that we don’t have the luxury of wasting in combating the climate threat.  If fear politics wins the day, we will have lost the opportunity to influence the global climate mitigation effort.  If fear trumps necessity, we are likely to miss the new green industrial revolution that is beginning to envelop the world and the economic and adaptive opportunities this will bring.

The politics of climate mitigation will be messy.  However, there is one fundamental point that we need to remember: if our political solutions do not match the well-documented seriousness of the climate change threat, we will all lose.  It has never been more important climate activists and more broadly those people who long for a caring and just society to make a stand and reject baseless spin and the politics of fear politics, from whichever party and in whatever form it emanates.

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For detailed analysis of the carbon pricing debate and the government’s specific policy proposal, take a look at these sources…

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Dr. Benjamin Habib is a Lecturer in Politics and International Relations at La Trobe University, Albury-Wodonga. Ben’s research project projects include North Korea’s motivations for nuclear proliferation, East Asian security, international politics of climate change, and methodologies for undergraduate teaching. He also teaches Australian politics.  Ben undertook his PhD candidature at Flinders University in Adelaide, Australia, and has worked previously the Australian Department of Immigration and Citizenship.  He has spent time teaching English in Dandong, China, and has also studied at Keimyung University in Daegu, South Korea.

Ben welcomes constructive feedback.  Please comment below, or contact Ben at b.habib@latrobe.edu.au.

The views in this story are those of the author and not necessarily those of Our Voice: Politics Albury-Wodonga.

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7 responses to “The Carbon Pricing Debate — A Battle for Australia’s Soul

  1. “If fear politics is allowed to triumph in this debate, Australia’s greenhouse gas reduction effort will be stalled for many years, years that we don’t have the luxury of wasting in combating the climate threat. ”

    Oh boy, in whose back pocket do you reside? This is biased tripe. The ACC alarmism is an example of fear politics and you know it. And who cares about Australia’s greenhouse gas reduction efforts, Australia has a population of only 22 million people, it is irrelevant. It is the 50th lowest population of any country in the world and has the 148th lowest birthrate. What conceit, just how important do you think Australia is in the scheme of things? It isn’t. Just this year, China’s increase in CO2 emissions alone blows Australia’s entire yield completely out of the water. If Australia could reduce it’s co2 output to zero it would make no difference at all, and you know this. Yet you accuse the right of fear politics, outrageous. So all of this talk you have posted above looks like nothing more than political posturing. After writing this, you have little credibility; you seem to be just another green cheerleader. That’s why I ask, in whose back pocket do you reside?

    • “And who cares about Australia’s greenhouse gas reduction efforts, Australia has a population of only 22 million people, it is irrelevant.”

      This is the bludgers argument and a rather mypoic one at that. There are many opportunities that could be seized by recognising there is a problem and nutting out how to fix it. Australia is a rich country by any measure and we have both the capacity and intellignece to develop both hard and soft solutions to reduce carbon emissions while improving low carbon renewable energy sources.

      The bleating whinges of the lazy bludgers like you that that just want to dig it up and burn it all, leaving nothing but a scorched earth for future generations are a repugnant stain on the human character.

      • “This is the bludgers argument and a rather mypoic one at that”

        Um, 22 million people is 3/1000ths of the earths human population. And you think I’m myopic. Sheesh.

        Suggesting that a country with 3/1000th the human population, which intends to reduce its co2 emissions by 10% over 40 years could possibly have any kind of impact is megalomanic delusions of grandeur.

      • Good of you to rejoin the discussion after six months Klem.

        You make an interesting, if worn out point on the size of Australia’s emissions share. The problem with this argument is that every country on Earth could make that same argument and then no-one would commit to any action. The fact is, all industrialised countries are figuring out how to reduce their emissions footprint right now in ways that are appropriate for their national circumstances, so the argument that we’re acting ahead of everyone else is erroneous. Emissions trading schemes are either operating or coming soon in the EU, China, New Zealand, the UK and at the state level in the US. The Canadian state of British Columbia has had a successful carbon tax for three years. All of these carbon price models are being improved and inter-linked as further new systems come into existence.

        While clearly the US or China’s gross emissions dwarf Australia’s, we here in Australia do not have any direct influence over the emissions reduction efforts of those countries. We do, however, have direct influence in emissions reduction efforts here in Australia; take responsibility for our own patch first, and in so doing set a positive example and raise the incentive for other countries to do the same. As a middle power country that wields considerable influence on the world stage (“punching above our weight” is the phrase politicians frequently use), Australia is in a strong position to do just that (it’s called “soft power” in international relations).

        Also, as a global commons, the atmosphere cannot be divided into discrete fragments to match the world’s political divisions (which are themselves social constructs). Which means that the more accurate measure of carbon culpability is per capita emissions, rather than gross national emissions. When we consider our emissions footprint on a per capita basis, Australians are amongst the worst greenhouse polluters on the planet. The lesson when we consider both gross and per capita measurements together is that emissions mitigation is everyone’s problem and therefore everyone’s responsibility.

        But if we look at this in terms of pure economic self interest, by doing nothing Australia would be poised to miss the boat on what is shaping up as the second industrial revolution as industrialised countries transition away from fossil fuel energy (for reasons including but not exclusive to climate change). That would leave Australia as little more than a quarry, our fortunes bound by the resource curse. That doesn’t seem like a particularly wise strategic plan for the Australian economy.

    • I don’t feel irrelevant or unimportant in the scheme of things. And I’m certainly not in anyone’s back pocket. All sorts of sayings come to mind about things like laggards and leaders, part of the solution or part of the problem, etc.

      As an environmental scientist, I fully support Ben’s position. But I also understand that as a society we are trained extremely well to see the economic issues above all others (and some may call this self interest) and most of us lack the understanding and awareness that society, economy and envirionment are intrinsically and inherently intertwined.

      One thing that does need discussion, particularly with those who view the world through economic issues first and foremost, is the fact that we are part of a global community and a global economy. The global economy is tied to carbon and that is clearly unsustainable (happy to trot out data in support of that, but it is easy to find using an internet search engine).

      We may already be heading toward the laggard side of a global economic shift and the Australian economy (not to mention society and environment) are already suffering. Australain innovators in the non-carbon economy are already being forced to seek investment funds from offshore and/or are being forced to shift offshore. For example, see what’s happening with Australian innovators such as Papyrus Australia (ASX: PPY), Ceramic Fuel Cells (ASX: CFU) or Dyesol (ASX: DYE). Without a price on carbon to force investment in these innovators and other non-carbon economy innovations the economic development they represent will be lost or limited for Australia.

      How do our self-interested, laggard economic policies look if we remain locked into an unsustainable carbon economy when the rest of the world has shifted to a new, more sustainable economy? Not too good and inherently self-defeating.

  2. The fear campaign led by Tony Abbott against a price on pollution and action on climate change is a dangerous development in Australian politics.

    Now Tony Abbott, supported by right-wing shock jocks is trying to create an impression of strong community opposition with anti-climate action rallies led by climate deniers being held around the country THIS Saturday.

    It is important that we hold alternative events that show there is in fact strong support for climate action.

    Get up!, the Australian Conservation Foundation, the Australian Council of Trade Unions and the Australian Youth Climate Coalition have called for a gathering this Saturday of everyone who wants real action on climate change.

    They say “If we’re successful, the media won’t be able report on the anti-carbon price rallies without also reporting that more people turned out to express support for a price on pollution.”

    Where: Treasury Place, Melbourne.
    When: This Saturday (March 12) at 11am.

    It is important that this event be a positive, mainstream and non-partisan expression of support for a price on pollution and climate action. No politicians will be speaking but it’s important that you are out there expressing your support with your own hand made placards and signs.

    Please make a big effort to come, this could be a turning point in the movement for climate action and Australian politics, now is the time to stand up.

    Together we can create a clean energy future.

  3. Hi Ben,

    Beautifully put and absolutely spot on. The hubristic assumptions you note are, I feel, quite correct and I am often stunned when I hear them in conversations with others. Our dependence on and faith in technology is flawed. We can see this quite clearly when we consider the simple and broad equation I = P x A x T (Impact = Population x Affluence x Technology). Given Governments worldwide want to increase their population ((P) in order to increase their economy) and affluence of their citizens (A) it doesn’t take much to realise that we’re depending on a rather large negative value for technology (T)!! While technological advances particularly in production have managed to keep our impact down a little, I seriously doubt we can balance this equation with technology alone while P and A are ever increasing. And why would we? As you say, there are many rewards in the simpler life.

    Natural systems work like any other systems – tug on something and you will find it connected to everything else as we saw with the GFC. It is a shame most of don’t understand this. Or is it that most of us don’t want to?

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