If not the carbon tax, then what?

Greg Hunt, the Opposition’s spokesperson on Climate Action, is trying very hard to convince anyone who will listen that the Coalition can and will repeal Labor’s carbon tax if it wins government. He responds to a well-considered piece by David Forman on the political difficulties of doing so.

I want to make two points about Hunt’s — and the Coalition’s — position. First, despite the Coalition’s furious pronouncements within the climate change policy area, it doesn’t appear to take that policy area very seriously. Second, Hunt displays brazenly wishful thinking in his estimation of his party’s ability to scrap the carbon tax if elected. I’ll address the latter in another post.

In his article, Hunt mainly just rehashes the cost effectiveness argument against the carbon tax; i.e. that it costs an awful lot and doesn’t substantially reduce carbon emissions. I don’t have the patience to sift through Hunt’s references to confirm his numbers, but his only purpose in citing them is to call the tax a “mammoth expenditure”. This is futile without some point of comparison (e.g. between Labor’s policy and the Coalition’s policy), which Hunt doesn’t provide.

The other part of the argument seeks to demonstrate that the carbon tax has very little effect. I don’t necessarily dispute this, as far as our specific implementation of the tax is concerned. Perhaps a lot more could be done much sooner. However, Hunt cites a think tank, rather misleadingly called the “Copenhagen Consensus”, which seems to argue against any sort of carbon tax or emissions trading scheme as a response to climate change. The think tank was led by Bjørn Lomborg and is now defunct.

Importantly, Hunt’s argument can’t really be understood without quietly adopting the notion that carbon pricing is purely an aspirational (or add-on) policy — something it would be nice to have, but only if it fits in with our principal goals of maximising year-to-year employment and GDP statistics. And that notion shapes our response to the policy’s success or failure. If it’s judged to be “not working”, then by implication it’s “not worth the expense” and so we can simply get rid of it and forget the whole issue. We tried it, and it didn’t work out. Oh well, let’s move on.

But not so fast. Any sensible debate over the carbon tax must maintain a connection with the consequences — economic, environmental and humanitarian — of the alternative. The Stern Review, for instance, is the most comprehensive assessment so far (as far as I know) of the economic effects of climate change. The summary of the conclusions says this:

Using the results from formal economic models, the Review estimates that if we don’t act, the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year, now and forever. If a wider range of risks and impacts is taken into account, the estimates of damage could rise to 20% of GDP or more.

In contrast, the costs of action – reducing greenhouse gas emissions to avoid the worst impacts of climate change – can be limited to around 1% of global GDP each year.

In other words, however hideously expensive climate change mitigation policies (like carbon taxes) might be, they must be compared to the horrific economic ruin likely to arise from unmitigated climate change.

The summary later adds this:

Three elements of policy are required for an effective global response. The first is the pricing of carbon, implemented through tax, trading or regulation. The second is policy to support innovation and the deployment of low-carbon technologies. And the third is action to remove barriers to
energy efficiency, and to inform, educate and persuade individuals about what they can do to respond to climate change.

This rather underpins the government’s policy, at least in principle if not magnitude.

Of course, in the politics of climate change, we have a difficult time connecting policy to reality, because it is an unfathomably complex subject. Moreover, there is an army of ideological warriors ready to wage war upon any and all supporting evidence and analysis with an ever-growing arsenal of well-rehearsed factoids. But either you buy into the global conspiracy theory, or you don’t. There’s no half-way point that makes any sense. (Even if you were to discredit three quarters of the world’s climate research as fraudulent, what remains is still more than enough to support climate action.) So, let’s say your understanding of human nature is such that you don’t think countless thousands of nerdy, egotistical, hyper-competitive, human researchers are all working together to choreograph a super-villainous, comic-book-esque deception on a scale never before imagined. And let’s say you don’t quite grasp the logic of free-market libertarians who appear to believe that, since the free market cannot apparently solve the problem of climate change without government intervention, the problem therefore cannot possibly exist in the first place. (That last link actually deals with libertarian reactions to a hypothetical asteroid impact, but the principle is the same.)

There is real data and real analysis that paints an increasingly dark picture of the consequences of climate change. We have begun to contemplate a 4-6 degree temperature rise, far beyond the 2 degrees that international negotiations have targeted. Why? In part, future climate projections have relied on very optimistic assumptions about political action, which we have resoundingly failed to meet. These kinds of temperature increases are easily catastrophic, according to even the World Bank (of all institutions).

Even more importantly, this is not a case of “Oh well, our carbon tax didn’t work. Let’s forget about it and go home”. There is no “it’s already as bad as it can get, so let’s not worry”. The problem will simply keep getting worse and worse and worse until we fix it. Warming and sea-level rises will not stop in the year 2100, for instance (the oft-used time frame for climate projections). For temperature rises exceeding 7 degrees, parts of the world are likely to become uninhabitable — too hot and humid for humans to maintain our necessary body temperature, even with wind and water1. Given what is at stake, we can’t walk away from the table; we can’t get out of the game. Perhaps we’ve already failed on climate change, but there are many degrees of failure, so to speak, and even now we can make things so much worse than they already are. This is not an academic curiosity that would be a good idea to address if only it was a little more convenient to do so. Climate change will eventually, inevitably reshape our whole global civilisation.

So, it is important to debate whether (and to what extent) the carbon tax will succeed or fail. Perhaps it is failing. Perhaps there ought to be a subtly or radically different policy. It is entirely appropriate for Greg Hunt (and others) to point out the relative lack of effect the carbon tax will have on our domestic carbon emissions. These concerns and criticisms go to the heart of an immensely important issue.

However, Greg Hunt is more than a commentator. He represents the alternative government, and as such his talk of the carbon tax being an “environmental failure” must be matched by an alternative policy that is objectively, demonstrably more likely to succeed. Given his title, you would presume it is his job to co-ordinate and articulate such a policy. The Opposition does have a climate policy, but you wouldn’t know it from reading Hunt’s response. He doesn’t see fit to even mention it. Think about that. Even when going out of his way to respond to an article about his party’s position on climate action, the Shadow Minister for Climate Action declines to discuss his actual policy.

That policy, even taken at face value, is highly dubious. It is intended to match the government’s commitment to a 5% reduction in carbon emissions by 2020 (below levels in 2000). Yet, sequestering carbon in soil — a major part of the Coalition’s plan — is still essentially theoretical. Another policy component involves paying polluters to stop polluting, but according to various institutions including Treasury, this is hideously expensive, inefficient and ultimately unrealistic. In short, Greg Hunt’s policy suffers from much worse versions of the same problems he ascribes to the carbon tax. He even brazenly argues that other countries have said “no” to a carbon tax, but major parts of his own alternative approach are not even on the table internationally.

And there are reasons to doubt the Coalition’s commitment to even its own policy, even if it were feasible. Tony Abbott’s rise to leadership is the product of underlying climate scepticism within the Coalition, manifested for instance in Nick Minchin and Barnaby Joyce, and Abbott’s occasional “gaffes” make it hard to believe he understands the magnitude of the problem. Greg Hunt does not enhance the Coalition’s credibility through his lack of enthusiasm for his own policy. Malcolm Turnbull observes that the Coalition’s policy — presumably since it’s just a list of government expenditures (unlike a tax or trading scheme) — is designed to be easy to scrap even after implementation.

Whatever level of deceit you attribute to Gillard for making and breaking a promise not to introduce a carbon tax, and however ineffective you think that carbon tax might be, her opponents do not present us with any choice. From Greg Hunt, we need someone who can at least pretend to be interested in the subject matter — a matter of grave global importance — beyond merely promising to trash someone else’s attempt to solve the problem.

  1. In such extremes, air conditioning would be a matter of life and death for even the healthiest people. Power cuts would create major humanitarian disasters. []