Carbon pricing has been a difficult policy for Australian politicians to implement and has contributed to the downfall of several senior political leaders. In 2009, Malcolm Turnbull’s own party stripped him of the leadership after supporting the Labor government’s Carbon Pollution Reduction Scheme. Last year, Prime Minister Rudd’s decision to defer the ETS sparked the loss of confidence that eventuated in his downfall. It is no understatement that the current carbon price push is a risk to the Gillard prime ministership. Though carbon pricing has contributed to ill political fortunes, it’s worth remembering that there is more to climate policy than the carbon price.
Climate advocate Joel Dignam asserts that ‘If Gillard's attempt to put a price tag on pollution fails, climate change…will be seen as a poisoned chalice from which no sane politician could drink.’ He warns that failure to pass the measure will ‘undo years of progress.’ While I appreciate Dignam’s concern, he conflates carbon pricing with climate policy. There are a host of policies to address climate change and decarbonise the economy, the viability of which is independent to the fate of carbon pricing.
The United States is a case in point. Even with a majority in the House of Representatives and a filibuster-proof ‘supermajority’ in the Senate, the Democrats could not pass a cap-and-trade bill. The death of cap-and-trade legislation was not the end of climate action though. Measures to decarbonise the US economy are progressing despite the fact that carbon price measures are not politically viable.
In his 2011 State of the Union address, Obama announced a national goal to produce 80 per cent of the nation’s electricity from “clean” sources by 2035 (this includes gas and nuclear power). According to Michael Levi, Obama’s goal would result in a larger share of electricity generated from ‘clean’ sources by 2035 than the cap-and-trade bills considered by the Congress. Rolling out high-speed rail (HSR) infrastructure has also emerged as a priority for the President. Earlier this year, Obama requested $53 billion over six years to kick-start the construction of a national HSR network that will provide a low-carbon alternative to air travel.
Federal government loan guarantees are driving the development of the world’s largest concentrating solar thermal power plant and wind farm. The 390 MW Ivanpah solar thermal project in California and 845 MW Shepherd’s Flat wind farm in Oregon will provide enough clean electricity to power 140,000 and 235,000 homes respectively. Other noteworthy initiatives include the US military’s ambitious renewable energy targets and the Department of Energy’s SunShot Initiative. The latter aims to cut the cost of large-scale solar electricity to fossil fuel levels by 2020 on an unsubsidised basis.
Perhaps seeking to compensate for the government’s poor sales job, Dignam urges those who want ‘…a safe climate ought to throw their weight behind [the carbon price]. Not only for the value of the policy itself, but simply because, within the dominant public narrative, there is no alternative.’ Though the for/against binary is helpful for proponents of the carbon price, it is important for concerned citizens and groups to demand additional climate policies.
Decarbonising Australia will require infrastructure like high-speed rail, smart grids, long-distance transmission lines, electric vehicle recharge stations, and baseload solar power plants. Regardless of whether Australia gets a carbon price, public investment will still be needed to fund these projects that are currently beyond the capacity of the private sector. I’ve argued previously, that focusing on climate-friendly infrastructure has excellent potential to appeal to the aspirations of Australians.
While carbon-pricing mechanisms might captivate bureaucrats and policy wonks, I’m not convinced that it has won the hearts and minds of Australian citizens. If the carbon price policy resonated with ‘mainstream’ Australia the policy would have much higher support public polling (currently around 30 per cent – exhibit A and B). And the government wouldn’t have to provide generous compensation for households to entice support.
Politically speaking, it would be much harder for opposition to criticise tangible nation-building infrastructure projects. Despite their best efforts, Abbott has not been able to turn public opinion against the government’s current nation building project the National Broadband Network (56 per cent support the NBN and 69 per cent think that the project is important).
Prominent science communicator Tim Flannery, now the government’s Climate Change Commissioner, has called for a nation-building response to climate change. ‘Given the scale of the threat and the inevitability of change, political responses are pitifully inadequate,’ Flannery wrote in 2006. ‘Instead of tinkering around the edges we need a new vision - one as grand and purposeful as the Snowy Mountains scheme - a vision that will pole-vault Australia from denying laggard to the forefront of innovation and best environmental practice.’
Of course, carbon pricing and nation building investments aren’t mutually exclusive. India introduced a levy on domestic and imported coal last year. The measure is not for the purpose of establishing a price signal, but rather a $633 million revenue stream for deploying solar technology. Unfortunately, few have called for the carbon price revenue to be used for climate-friendly infrastructure in Australia.
The fate of the carbon price will be known in the second half of 2011. Whatever the outcome, the imperative for effective climate change policies will remain strong.
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