Extract from The Guardian
There
are really two debates on climate change: one on action, the other on
the semantics of carbon pricing. Both have been resolved, albeit in an
unfortunate way
As an economic researcher, most of my work focuses on uncertainty.
In particular, I study the problem of unforeseen contingencies, or, in
ordinary language, surprises.
As a researcher on climate change and member of the Climate Change Authority, easily the biggest surprise of this year for me was the appearance of Clive Palmer and Al Gore, jointly discussing the problem of climate change.
After that shock, yesterday’s press conference seemed like part of the “new normal”. Featuring Palmer, environment minister Greg Hunt and Bernie Fraser, chairman of the CCA, the government’s Direct Action plan was agreed to and yet another study into the possibility of an Emissions Trading Scheme announced.
To understand what is going on here, it is necessary to observe that there are really two separate debates about climate policy.
The first, substantive, debate is whether we should be acting to stabilise the global climate in line with our shared global commitment to limit warming to 2 degrees celsius. Any serious action along these lines must involve an implicit or explicit price on carbon dioxide emissions.
The opponents of action fit into two groups, both strongly represented in the government’s support base. The first are interest groups associated with fossil fuels, and particularly coal, for whom effective mitigation (in the absence of a so-far nonexistent technology for carbon capture and storage on a large scale) represents an existential threat far more immediate than the destruction of most planetary ecosystems over the next century.
The other group are rightwing tribalists who oppose climate mitigation because groups they hate (environmentalists and scientists) support it. These tribalists claim to be “sceptics” about the science of climate change. In reality, their position bears no relationship to scepticism or to any kind of evidence-based belief. Rather it is the dogmatic restatement of a tribal shibboleth, similar to creationism, trutherism and birtherism.
These groups saw the election of the Abbott government as a vindication, but it has become clear that they represent a minority viewpoint. The coincidental (though predictable in the long term) occurrence of record-breaking heatwaves has further undermined them.
The second dispute, entirely semantic but nonetheless bitter and politically consequential is about the words used to describe the carbon price and the design of policies that can be made to fit these words.
Because of its history, tangled with the prime ministerial career of Julia Gillard, the term “carbon tax” is politically toxic, particularly to the LNP. On the other hand, subsidy schemes like Labor’s carbon farming initiative, which provides the model for the government’s emission reduction fund (aka direct action) are seen as acceptable.
Yet in economic terms, a subsidy for not doing something has the same effects as a tax on doing it. The main difference is that it is much easier to determine that someone is emitting CO2 and tax them, than to determine that they are emitting less than they would otherwise do, and paying a subsidy.
An emissions trading scheme also places a price on carbon emissions. In this case, however, the government determines the volume of emissions that will be allowed, and market trade determines the price. The main advantage of an ETS over other ways of implementing a carbon price is that it facilitates international trade, meaning that Australia can take advantage of low-cost emissions opportunities overseas, to allow more time for the difficult task of decarbonising our own economy.
Hopefully, having ended the carbon tax, and having been forced to accept the idea of an ETS, at least as a subject of study, the Abbott government will be in a position to move on both from the doomed denialism of the rightwing tribalists and the semantics of the carbon price, and return Australia to the mainstream of global policy on climate change. The upcoming G20 meeting would be a great opportunity.
As a researcher on climate change and member of the Climate Change Authority, easily the biggest surprise of this year for me was the appearance of Clive Palmer and Al Gore, jointly discussing the problem of climate change.
After that shock, yesterday’s press conference seemed like part of the “new normal”. Featuring Palmer, environment minister Greg Hunt and Bernie Fraser, chairman of the CCA, the government’s Direct Action plan was agreed to and yet another study into the possibility of an Emissions Trading Scheme announced.
To understand what is going on here, it is necessary to observe that there are really two separate debates about climate policy.
The first, substantive, debate is whether we should be acting to stabilise the global climate in line with our shared global commitment to limit warming to 2 degrees celsius. Any serious action along these lines must involve an implicit or explicit price on carbon dioxide emissions.
The opponents of action fit into two groups, both strongly represented in the government’s support base. The first are interest groups associated with fossil fuels, and particularly coal, for whom effective mitigation (in the absence of a so-far nonexistent technology for carbon capture and storage on a large scale) represents an existential threat far more immediate than the destruction of most planetary ecosystems over the next century.
The other group are rightwing tribalists who oppose climate mitigation because groups they hate (environmentalists and scientists) support it. These tribalists claim to be “sceptics” about the science of climate change. In reality, their position bears no relationship to scepticism or to any kind of evidence-based belief. Rather it is the dogmatic restatement of a tribal shibboleth, similar to creationism, trutherism and birtherism.
These groups saw the election of the Abbott government as a vindication, but it has become clear that they represent a minority viewpoint. The coincidental (though predictable in the long term) occurrence of record-breaking heatwaves has further undermined them.
The second dispute, entirely semantic but nonetheless bitter and politically consequential is about the words used to describe the carbon price and the design of policies that can be made to fit these words.
Because of its history, tangled with the prime ministerial career of Julia Gillard, the term “carbon tax” is politically toxic, particularly to the LNP. On the other hand, subsidy schemes like Labor’s carbon farming initiative, which provides the model for the government’s emission reduction fund (aka direct action) are seen as acceptable.
Yet in economic terms, a subsidy for not doing something has the same effects as a tax on doing it. The main difference is that it is much easier to determine that someone is emitting CO2 and tax them, than to determine that they are emitting less than they would otherwise do, and paying a subsidy.
An emissions trading scheme also places a price on carbon emissions. In this case, however, the government determines the volume of emissions that will be allowed, and market trade determines the price. The main advantage of an ETS over other ways of implementing a carbon price is that it facilitates international trade, meaning that Australia can take advantage of low-cost emissions opportunities overseas, to allow more time for the difficult task of decarbonising our own economy.
Hopefully, having ended the carbon tax, and having been forced to accept the idea of an ETS, at least as a subject of study, the Abbott government will be in a position to move on both from the doomed denialism of the rightwing tribalists and the semantics of the carbon price, and return Australia to the mainstream of global policy on climate change. The upcoming G20 meeting would be a great opportunity.
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