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Air Pollution. Credit: US Parks Service

By Simon Hukin:

I admit, I’m a lefty. Even within the ALP I’m a lefty. I should be all for solidarity; standing firmly behind the party line. But sometimes, as the old hymn goes, one must dare to be a Daniel. The Rudd Government’s Carbon Pollution Reduction Scheme (CPRS) is doomed to failure, even if the Coalition (which is looking increasingly like a Punch and Judy show) doesn’t kill it first.

The debate this country has never had is not between global warming advocates and sceptics, as the Nationals would have us believe. Rather it is a debate centred around how to address anthropogenic greenhouse gas emissions. Most of the proposed solutions do little more than tinker around the lip of the catastrophe curve, dealing with mandating energy-efficient globes, regulating energy star ratings, etc, etc. The big issue we now face is how to address the major causes of pollution – cars and agriculture, fossil fuel burning power stations.

The three most touted means of tackling our emissions problem are ‘command and control’, cap-and-trade, and carbon taxation.

Command and control boils down to the government simply ordering the polluters to clean up. Cap-and-trade (as favoured by the Rudd Government) is the creation of an artificial market for carbon; the Government sets a cap on the amount of carbon allowed to be emitted in any given time period and either auctions or gives away permits to those who can demonstrate a need. Once emissions have been reduced then permits may be sold to those who need them, and the level of the cap is gradually brought down to zero. Carbon taxation is imposing a tax on emitters relative to the quantity of greenhouse gas they emit and its concentration, in order to incentivise the reduction of emissions.

Helensburgh coal mine. Credit: Damian Baker.

Command and control will be extremely damaging to some polluters, such as utilities that rely heavily on dirty, old coal-fired power stations. A great many will find it impossible to meet the state mandated goal, exposing them to severe punitive measures — the costs of which they’ll pass on to their customers. Of all possible approaches, it would have the worst effect on the economy. However, it would work. Emissions would be reduced, and people would be discouraged from purchasing high-carbon goods and services.

Cap-and-trade has theoretical merit – it’s potentially less expensive, generates profit and allows for reductions in emissions. However, it also creates opportunities for cheating, leads to unpredictable fluctuations in energy prices and does nothing to offset high power costs for consumers. This is, of course, not to mention the myriad problems which come with not auctioning permits – as the Rudd Government proposes. Carbon taxes, however, can avoid these problems almost by default, while providing a more reliable market incentive to produce clean, renewable energy technologies and reduce emissions in the process.

Part Two of CPRS: A Taxing Question published tomorrow.

By Simon Hukin: Interested in writing on this or another category for theangle.org? Contact us via our online form.

Simon Hukin is a student at the Australian National University, General Secretary of the Western Australian Secondary Students’ Association, peripatetic music teacher and general curmudgeon. He is heavily involved in politics and the union movement.

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