Greg Combet has more policy hounds on his tail than any other minister. He is in charge of the introduction of a “carbon tax”, and the arguments against him have been outnumbering those for.
So the Climate Change Minister went to the National Press Club to highlight—and he hoped erase—some of those policy problems which are dogging this attempt to get up a pricing mechanism for carbon pollution.
He all but ticked them off, one by one, in front of the audience.
Combet:
Firstly, Australia is one of the world’s top 20 polluters and we release more pollution per person than any other country in the developed world - more than the US. Not only is it in our national interest to act, we have a responsibility to do so.
As politely as he could, Combet told us we are energy pigs who burn our way throuigh more carbon that even the over-indulgent Americans. We make the Americans look like a candle-power economy. For our own good we should end the waste and get more energy efficient.
Combet:
Just as the 1980s reforms laid down the bedrock of our current prosperity, pricing carbon will ensure that the Australian economy of the 21st century remains globally competitive. Critical to understanding the national interest case for taking action on climate change is an acknowledgement that long term reform should also be based on the principle of intergenerational equity.
There is a strong view that we have plenty of time to talk about this. It’s not as if the glaciers are going to melt any more slowly if we don’t take our time to get a pricing package right.
Rather than talk of acting now to ease global warning in the future, Combet put the carbon price in the context of a basic reform which had to start soon so that it could move throgh the economy for maximum benefit in the longer term.
Like those Hawke, Keating, Howard reforms from the `80s and `90s now kicking in, a carbon pricing system would benefit the economy one or two decades hence.
Combet:
China - the world’s largest emitter - is now the world’s largest manufacturer of both solar panels and wind turbines and is definitely reducing the carbon intensity of its economy. Only yesterday further information confirming China’s plans for emissions trading in six regions was reported. Despite a hostile Congress and a major economic downturn, the United States is also taking action at a national level, as well as at a state level. The US is progressively introducing regulations covering carbon pollution from large industrial facilities under its Clean Air Act.
One of the biggest obstacles to Australia taking on carbon pricing is the perception that it is a unilateral venture. Nobody, goes the argument, is as stupid as us, certainly not those constant carbon incinerators the Chinese. This is a consequence, in part, of the collapse of objectives at the 2009 UN’s Cophenhagen climate change conference. It seems as if it is now every man and country for themselves.
Combet has a simple message he must get through to Australian voters. And that is, “We are not alone”.
Combet:
At $20 in the steel industry, the average carbon price after 94.5 per cent assistance for the core pollution intensive activity would be around $2.60 per tonne of steel, out of a price per tonne of steel of around $800. In the aluminium industry, the average carbon price after assistance for the core pollution intensive activity would be around $18.70 per tonne of aluminium, out of a price of around $2,500 per tonne of aluminium.
The Government is being portrayed as a butcher of industry, of being ready to use a carbon price to slash Australian manufacturing and chase what is left off-shore. The minister wanted to put some perspective to the accusation.
He said fewer than 1000 companies would pay penalties for pollution, and that most emissions, about half, came from the 50 biggest emitters.
There would be assistance for vulnerable industries which used a lot of energy - so much that, Combet indicated, the addition to prices would be marginal.
Combet:
The Prime Minister has made it clear that we will put households first. There will be generous assistance for households to meet costs that may be passed on by the companies that are paying for their pollution. Assistance for pensioners and low and middle-income households will be a priority. I can assure you that under our carbon price more than 50 per cent of the carbon price revenue will be used to assist households; millions of households will be better off under the carbon price; and the assistance will be permanent.
This is where the dogs are barking loudest. The Abbott Opposition is maintaining its campaign that a “big new tax” is on the way and that the Government’s stubborn insistence on carbon pricing will be paid for out of household budgets.
Kevin Rudd didn’t push this element of his policy until it was too late.
The Minister has not just said pensioners, low and middle-income earners will be fully compensated for price increases; they will make a few dollars on top of that basic rebate.
So the scheme is scheduled to start in July, 2012, leading up to an election scheduled for late 2013. It might be handy for the Government to have extra dollars going to families in the lead-up to that election. But would the money be there? It might be that the Government would pay in advance to produce a warm feeling in the electorate that wasn’t caused by global heating.
Combet:
Leading Liberals such as John Howard, Peter Costello, Malcolm Turnbull, Joe Hockey and John Hewson, to name a few, are all on the record as supporting the market-based reform that the Government is trying to make.
The Minister would like you to know that pricing carbon is not the idea of weirdo lefties and bongo-brained environmentalists. The pantheon of Liberal leaders and near-leaders includes lots of people who think it is a sensible idea.
But it is a sign there is a long way to go on this issue if the former ACTU leader and Labor minister quotes John Howard with relish.
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