The carbon tax con: Why the ALP/Green carbon tax is a climate disaster

I am against the ALP/Green’s carbon tax. However you might be shocked to learn why. It's not because I miss out on my share of middle class welfare, it's not because I am a climate change denialist and it's not because I am a billionaire who makes my money from coal. I am against the tax because it will do nothing to reduce Australia’s carbon emissions. I am against the tax because it rewards polluting industries with billions. I am against the tax because it locks Australia into a market based response to Climate Change that is doomed to fail. This is a policy which is not a “good start” but one which will lock Australia into climate change policy failure for decades to come.

The carbon tax will actually see Australia’s carbon emmisions INCREASE by 2020!

Perhaps the most shocking thing about the carbon tax proposal is that under the Government’s own figures, not only will it fail to deliver the paltry target of a 5% cut in emissions it's worse than that, under the Governments own Treasury modeling there will be an increase in national emissions from 582 million tonnes of carbon now, to 621 million tonnes in 2020.

The claimed 5% reduction is going to be “achieved” by the purchase of “carbon credits” generated through various dubious projects internationally, as well as by emissions-reducing changes in Australian agricultural industries. It is a shocking case of disinformation by the ALP, Greens, Environment groups and the media to neglect to explain this fact to the Australian public. The supposed benefits of the scheme therefore are not a reduction in real terms but a reduction compared to “business as usual” ie. if we did nothing.

To put the almost comical inadequateness of this policy in context, one needs to only note that the IPCC (UN International Panel on Climate Change) in 2007 said that for global emissions to stabilize at 450ppm in the atmosphere(a level that many scientists think is very dangerous), developed or richer nations need to cut their emission by 25%-40% by 2020! Why is this fact not being discussed. Has the environment movement joined the climate denialist camp and abandoned the credibility of the IPCC?

The carbon tax will massively compensate polluting industries.

The carbon tax is being sold to the public under the line that its making the “polluters pay”! If only! Whilst 500 companies are being taxed, the fine print once again reveals that the biggest polluting industries far from being punished are being rewarded by this scheme. The scheme is putting aside a total of $9.2 billion dollars to compensate the biggest industrial polluters.

This includes the steel, aluminium, zinc, pulp and paper makers who will get free permits representing 94.5 per cent of industry average carbon costs. That’s right- the biggest polluters, supposedly on the grounds that they are “trade exposed”, are being allowed to pollute for free. So much for “free market” principles! points out the compensation package for the steel industry is so generous that it equates to $60,000 of handouts for every job in the industry. The coal industry is being “compensated equivalent to $10,000 per job". The Illawarra Mercury has reported that Blue Scope Steel corporation will be the biggest single beneficiary of the carbon tax proposal with its carbon bill “effectively paid for” by the public purse!

Other carbon tax handouts include a $1.2 billion Clean Technology Program aimed at improving energy efficiency in manufacturing and $1.3 billion dollars over six years for the coal industry as part of the “Coal Sector Jobs Package” and a “Coal Mining Abatement Technology Support Package”. No wonder Julia Gillard keeps reassuring the coal industry that they have a bright future. Even polluters like the multi-national International Power who owns Australia’s dirtiest power plant in the Latrobe Valley have nothing to fear. The tax includes plans to retire 2000 megawatts of dirtiest power generators by 2020 but only through negotiation and compensation for the private operators. In other words if Hazelwood closes its owners and the shareholders will exit the stage laughing all the way to the bank with hundreds of millions of tax payers dollars.

So whilst ordinary people under this tax are expected to cop higher energy bills and an increased cost of living powerful polluters are rewarded for continuing to be climate criminals.

The carbon tax is based on neo-liberal market principles that will perpetuate the problem

To quote Albert Einstein “We can’t solve problems by using the same kind of thinking we used when we created them”. Fundamentalist market policies which place profit before all other considerations including the planet are the reason why we are now facing runaway climate change. Unfortunately the Greens and the ALP obviously believe that the market will save us. Whilst market based solutions may play some role in tackling climate change the carbon tax proposal relies entirely on the market to reduce emissions.

For example, Julia Gillard was able to claim that she hasn’t introduced a tax at all because in 2015 the scheme will morph into an Emission Trading Scheme. The Australian financial sector is desperate to see an ETS get up as the people who gave us the GFC can’t wait to get their hands on another billion dollar financial market to bet and scam on. Industry loves an ETS too as it allows them to either scam their pollution figures or buy their way out of polluting through purchasing offsets. The European Union’s experience of a cap and trade scheme has been illustrative where it has failed to bring down emissions but generated profits for speculators and polluters. For a good analysis of why Cap and Trade schemes are flawed watch The Story of Cap and Trade by Annie Leonard.

We have read banner headlines that the carbon tax proposal promises to deliver billions to the renewable energy sector. For example a $10 billion Clean Energy Corporation will be created. However closer inspection reveals firstly that not all the money is targeted at renewables but will be spent on “Investments will focus on renewable energy, energy efficiency and low emissions technologies and the transformation of existing manufacturing businesses to re-focus on meeting demand for inputs for these sectors.” How much for example of this money will be going on the fantasy of clean coal? How much will be spent on more handouts to big polluters?

Secondly, the Clean Energy Corporation this is not new public spending on renewables as such but rather it will “drive innovation through commercial investments in clean energy through loans, loan guarantees and equity investments”. In other words, the Government is effectively creating a new financial institution or investment bank that will make loans to ventures it deems will be profitable rather than spending money on renewable energy projects directly. Only profitable projects, not necessarily the most needed projects, will be given loans and once again the market will determine priorities based on profit not need.

The sad truth is that not one extra cent of public money is going to be spent directly on renewables as a result of this plan. The fine print of the $3.2 billion Australian Renewable Energy Agency reveals it is being created to manage existing funds. It is not, as it is being portrayed, new revenue but merely a new way of managing existing revenue. So the claim the carbon tax will result in $3 billion dollars of money for renewables is unfortunately far from the truth. .

The alternative to market fundamentalism
What we need in contrast to these market policies is good old fashioned public investment in renewable energy. Quite simply the government needs to pour tens of billions of dollars into building public or community owned renewable energy infracture as outlined in plans such as the Beyond Zero Emissions plan to make carbon neutral by 2020.

Where would this money come from you say? Well perhaps we could tax the super profits of the biggest mining companies or the banks. Perhaps we could immediately end the billions in dollars of subsidies to the fossil fuel industries. Or perhaps we could reduce the $25 billion dollars a year we spend on Defence fighting wars for the U.S. Let's never forget that the coal powered electricity industry in this country was built exactly the same way. Not through “market forces” but by the spending of billions of dollars of public money on generators, mines and the power grid. Just because much of this industry has been subsequently sold off to the private sector doesn’t change this fact. If we want a renewable energy industry quickly and on a massive scale, we can’t afford to wait until it is profitable, we need to spend public money on it now!

The political failure of the environment movement

For me the most disturbing element of the whole carbon tax “debate” has been the way the Australian environment movement, both the NGO’s and the Green Party, have become so co-opted by the ALP that they have effectively become a left wing faction of the party. None of the Green groups have even squeaked about the inadequacy of a 5% target or about the major flaws in the plan. Instead they have all dutifully lined up to herald it either as a bold first step or an imperfect but necessary “first step”. Mark Latham once described the Liberal Party as a “conga line of suckholes” in terms of their support of the U.S. war in Iraq, and it is a term that springs to mind to describe the environment movements support of the ALP. Groups such as Get Up have been playing an ideological game to create a dynamic that you either support the carbon tax or you are a climate denialist. No space has been created within the environment movement to discuss the actual merits of the plan. Get Up was organising rallies in support of the tax even before any details were known. The whole carbon debate is being turned into one long pre-election campaign for the ALP. The green movement is trying to manipulate people into turning Tony Abbot into a demonic figure versus Julia and Bob who will defend the planet! Given the hopelessness of the carbon tax plan this is a complete joke. Obviously on a personal level Tony Abbot is an obnoxious climate denialist but no evidence has been produced to demonstrate that the Liberal Parties “direct action plan” will produce less emissions reductions than the carbon tax and an ETS. Instead the plan has been opposed by the establishment and figures such as Ross Garnaut for being a form of socialism as it relies too much on direct public spending! So we have the bizarre situation where the ALP’s plan is being heralded by large elements of the media and the corporate world as it is so business friendly whilst Tony Abbot’s plan is being criticized as it relies on public spending and not the “free market” to tackle climate change. I cannot believe that the current plan if introduced by John Howard would have received a skerrick of support from the environment movement.

In summary, this carbon tax should be opposed by anyone who is serious about seeing “real action” on climate change. It is not "a good start" but a plan that will lock in failure for decades which is not time we can afford to waste. Don’t support a plan that will see Australia’s emissions rise by 2020. Don’t support a plan that will let the big polluters of the hook whilst ordinary people pay. Talk to people you know and be part of the campaign to spread the truth that this carbon tax will do nothing to tackle Australia’s contribution to climate pollution.


Emission will increase under the tax

Industry handouts

The failure of neo-liberal market policies in tackling climate change.



Dear writer (couldn't find a name anywhere)

You are probably right about the fact that emissions will not diminish in the near future (10-20 years from now). I must confess I haven't read your message properly, just skimmed through (it is far, far too long!!).

However, you can't deny there is a problem for the planet, and it is getting worse. Whether it's due to us, which I strongly suspect since We are terribly good at doing the wrong thing, are greedy, selfish, ignorant, racists, etc etc, OR due to a 'passing' quirk of the planets, etc etc, we have to do something!

I'm sure you will agree that doing NOTHING because of all the reasons you give above, is not going to be good either. I'm prepared to do anything (short of shooting some mine-owners!, whatever, to try and stop emissions!

Since no-one has ever done this before (ever!), we have to try! If it does not work, and the CSIRO advises us that it is not working, we can always turn it around, in the direction supplied by CSIRO. You'll be surprised how intelligent people (not pollies!) are, and resilient too. There are also quite bright local thinkers who can act properly, on the spot. I've been observing (Anglo-Saxon) Australians for several decades now.

An unmitigated optimist??? Yes, I suppose so. Why not give Julia's package a go?!?!



You should take the time to read the article, it answers your questions and comments.

Flower power, I agree that the carbon pricing package doesn't do enough to meet Australia's share of closing the emissions gap of limiting global warming to 2 degrees Celsius, but I think it is an important tipping point in climate policy in Australia with perhaps implications for international negotations.

Yes, emissions will continue to increase, but at a lower intensity.

I understand the fact the package was a political compromise to meet the demands of the the agricultural sector, transport sector, mining sector, big 'trade exposed' manufacturing business, Greens and Conservationists, and an attempt to make it electorally palatable. I believe business compensation has still been too generous. However, it is a much more comprehensive package than the CPRS; and it has the capacity to be scaleable in line with emission targets that will be determined by the new Climate Change Authority to meet the short term and long term legislated emission targets.

The ETS includes both a cap and a minimum floor price of $15 per tonne (indexed) with limits on how many offsets can be purchased internationally to resolve some of the shortcomings of the European scheme. I agree with you that emissions trading poses serious problems, but some of these issues can be dealt with by good governance and prudent regulation.

I have just spent 2 and a half days attending the Four Degrees or More? Conference in Melbourne which brought together some of Australia's most distinguished climate scientists and related academics along with a few overseas scientists. The outlook of living in a four degree world or even higher is a very real possibility with business as usual carbon emissions and would pose immense social and ecosystem challenges.

Most of the people who attended this conference know this and have been tirelessly trying to communicate the likely outcomes based upon science to politicians. They are aware of the big gap between the policy and the science.

I think the overwhelming feeling of the scientists and academics at this conference was that the carbon pricing package was a necessary start. Indeed, it's support for funding innovation in renewables and landuse carbon sequestration, and for supporting the challenges for biodiversity went beyond what was expected by many.

Professor Schellnhuber from the Potsdam Institute for Climate Impact Research discussed a few times that Germany has now embarked on phasing out fossil fuels by 2040 and as a result of the Fukushima disaster this year committed to phasing out nuclear power by 2022. It is a high risk path reliant on industrial innovation, boosting energy efficiency in the built environment and installing solar and wind capacity. They look at Australia envious of the possibilities for renewable energy available to us and why we are not developing them. But the reason is obvious: there is too much money in mining with all mainland states and the Federal Government having a financial vested interest in maintaining the status quo regarding coal mining and other mineral extraction.

You can watch Professor Hans Joachim Schellnhuber keynote address - Climate Change: The critical Decade at my blog. You can also read Climate Change Minister Greg Combet's early morning speech to the conference on Thursday - Science into Policy: Securing a Clean Energy Future for Australia. I hope to add further reviews of the conference to my blog and Indymedia

The path Germany is taking is a gigantic experiment, a new industrial revolution with 90% of the population behind it according to Schellnhuber. France and the UK and many other countries are watching, probably hoping for it's failure. But pioneering a new industrial revolution will also lead Germany to become an exporter of innovative low pollution technology and ideas. Germany is already a major manufacturer and exporter of solar photovoltaic panels and wind turbines.

Professor Schellnhuber was more pessimistic regarding action on climate change by the USA. He was still undecided whether Australia would follow the path of the US which would certainly lead to devastation of the fragile Australian ecosystems and the global environment if temperatures can not be constrained to two degrees of warming. We are in a critical decade and he welcomed Australia's initial step towards de-carbonising the Australian economy.

He also noted that "your country is carrying a lot of iconic weight. You have a lot of sympathy and that means a certain responsibility" which may influence international negotiations through the United Nations Framework Convention on Climate Change (UNFCCC). Climate activists in Canada and the USA are already starting to refer to the Australian carbon tax package to pressure further action in those countries.

The introduction of the carbon tax package should be seen as a tipping point. It is a small start to reducing emissions intensity in Australia and to boost energy and low pollution innovation. The real work will come in the good governance and regulation of the various funds and bureacracies to transform behaviour. One of the Professors at the conference held up in the final session a strip of photovoltaic flexible film. With more research and development to commercialise cost effective printing tecnology, one day power companies may come and pay you to install this film on your roof and wire it up to an inverter and connect to the grid. It is a small example of the technical innovations that might help us to transition to a low carbon society in future years with the right initial support and funding from either Government agencies or private venture capital.

If we oppose this package and it falters through the political process, it may be several years before policy action is again revisited on the Federal level to the same extent, and by that stage we may be looking at "oh shit, we are spending billions on climate adaptation and billions more on repairing the devastation from extreme weather events." Other countries may start imposing import taxes on our high carbon pollution goods, our agriculture may suffer the effects of changing climate with more drought, storms and floods of greater intensity, reduced water flows, collapse of the Murray Darling Basin, more extreme heat leading to greater bushfire risk.

I didn't mean this to be such a long winded reply, but I think the carbon price package does mark a significant climate policy tipping point that needs to be built upon.


I think the article clearly lays the case that if we support the carbon tax that:

1. it will make it impossible to reduce carbon emissions to prevent irreversible climate change
2. working people will bear the cost while the polluters will actually increase their profits

The 'Get Up' rallies showed that people are willing to mobilise to fight climate change. The problem has been the hijacking of the movement by corporate green-washers and ALP apologists watering down and confusing the issue or distracting us with the very tiny minority of climate change skeptics. Our focus should not be on begging for crumbs from corporate friendly parliament but telling people the truth and getting them out on the streets (where the politicians fear them most) in large numbers demanding real action on climate change.

If you can't see this then you're selling us all out.

The1999 Australian Republican referendum was defeated because the republicans were divided between those who want the Head of State, a symbolical position, be directly elected by the people and those who want it be chosen by 2/3 of the Parliament. Because of this division we, Australians are still under the Queen of England.

Let it be a lesson among those who advocate actions against greenhouse gas emissions. Divisions will take us nowhere. With such a complex problem with implications to ecology, economy, trade, international relations, people’s jobs and income, etc., there is no neat and perfect solution.

This is just a start. Hopefully, other nations will follow us, just like we are following the European Union and some other nations and states. As more and more countries join in doing something then this will stop our detractors. Then we can aim for better solutions. Let us keep the ball rolling.

I have only one point of dispute with this article. There is no evidence that we are facing runaway climate change. Other than that bit of hyperbole, it's right on the money. Regulation is a far more effective mechanism than the market. Just say to anyone who sells anything, "if you want to sell that in this market, you have to achieve less than so-and-so a carbon footprint". It's the same way we reduced the polution of cars, regulating emission standards, not relying on the fantasy of a free market that will aiutomatically find the most efficent and effective way to solve a problem. Regulation is also far easier to fine tune and balance social and economic considerations against emissions. Regulation also can provide a more stable economic environment to operate in than a market. Changes to emissions targets can be announced years in advance, so that everyone has time to adapt to meet the new targets. Markets can collapse, the EU carbon price has had several major adjustments. A degree of uncertianty is needed for speculators. If everyone had complete certainly about the market price, how would anyone be able to make money trading shares speculatively?

This is why no-one in business likes regulation. The only way to make more profit than the next guy is to acutally produce a superior product! In this case, one which meets the emissions standards more cheaply. That sounds like you'd actually have to do some real work and produce real reductions in emissions, rather than just push money and credits about trying to out-gamble the next guy. What a concept.

> There is no evidence that we are facing runaway climate change.

there is an ever growing mountain of clear and consistent evidence that we are facing runaway climate change.

you are free to believe whatever you like and free to disregard the science... however the evidence is exceptionally clear and consistent.

The carbon tax scheme does not have the wholehearted approval of the Greens. At the outcome they said this is not a Greens outcome. However it is the best they could get. The renewable energy scheme is not controlled by the govt. it is independent. The 5% target is regrettable, but unlike its previous incarnation, it is not locked in for ten years, and will increase over time.
We are all over the "domino effect", the civil war we were requested to join, in Vietnam, but it seems we are not over the "yellow hoards" who any day now might come screaming over our border(from China) and colonise us.This is why we are spending billions of dollars in an arms race with China. Think what we could do with just part of that money. Now think about half of it. Well maybe one day.
We have media which has given up journalism for propaganda and 'crap'. This is the enemy. We need the new media,like this, to have intelligent discourse.
No-one could have reached this outcome with the Greens. Whatever we think of Gillard, we have to know there is no alternative. Possibly the next great states-person PM (after Whitlam) hasn't been born. Kennedy was said to have 'political sex appeal'. Abbott has it, but when he opens his mouth, he is vacuous. Gillard doesn't have it and there's the rub. The only one who could take on Abbott is Keating, but he's been there, done that.

All those references and still missing the one that counts - an author's name!

Most of these arguments are naive or sophistry ignoring the real politik of the situation and the incremental change that will result. Not least a serious boost to global momentum for shift in government policies in the bigger polluting economies.

what do you expect with egg head conservatives in opposition and a largely 'my bum needs wiping every day'so stuff everyone else attitude. its better that the ball gets booted rather than not at all so that the game doesnt remain stagnant for another generation. if this is the best outcome even if it stinks so be it and then changes for the better will follow