(July 16*) Australia’s PM shows political courage on climate change

JEFFREY SIMPSON | Columnist profile | E-mail

From Saturday's Globe and Mail

Published Saturday, Jul. 16, 2011 2:00AM EDT

Last Sunday night, the Prime Minister of Australia went on national television.

Prime ministers in democratic countries take to the airwaves only if they have something extremely important to say. And Prime Minister Julia Gillarddid. She said something inconceivable in Canada, at least under Stephen Harper’s government.

“Most Australians now agree our climate is changing,” she said. “This is caused by carbon pollution. This has harmful effects on our environment and on the economy. And the government should act.”

And act it did. Next July 1, the Australian government will put a price of $23 a tonne on carbon for the country’s 500 largest emitters. Three years later, the government will convert that tax into an emissions trading scheme, or cap-and-trade, whereby the government will mandate emission limits and let the market set the price.

At a press conference, Ms. Gillard explained her thinking: “The avalanche of science tells us our climate is changing. The science is in. We know that out planet is warming. We know that warming is changing our climate.”

Climate change has been a political killer in Australia. Former Liberal (conservative) prime minister John Howard did little about it. His successor, Labor prime minister Kevin Rudd, failed to get serious measures approved. He had a deal, or so he thought, with the then Liberal leader, only to have ferocious climate change skeptics dethrone that leader. Mr. Rudd himself then was deposed in a political coup by Ms. Gillard.

She leads a minority Labor government, propped up by independents and Greens who began holding the balance-of-power in the Senate on July 4. To survive, she had to provide something that would satisfy her own party and the Greens.

She settled on a carbon tax on big polluters, followed by the cap-and-trade, with the money flowing into government coffers flowing back out in the form of tax cuts, support for energy efficiency, renewable energy and assistance for industries such as coal and steel that will struggle to reduce emissions. The country’s overall target will be to reduce emissions by 80 per cent of the 2000 levels by 2050.

Can Australia do it? Like Canada, Australia is a major user and exporter of fossil fuels. Replacing coal will be very hard. Getting this policy to stick will also be very hard, since Ms. Gillard’s popularity is low, and her Liberal opponents are strongly opposed to any serious measures to combat climate change.

She has two years until the next election, and it will be tough sledding to sell this policy, especially when the international community is making such little progress toward any kind of global agreement. Meanwhile, the terrible decade-long drought that struck Australia, and caused climate-change concerns to soar, ended last year.

In Canada, critics of a carbon tax predict economic disaster. In Australia, the Treasury department modelling shows a 10th-of-1-per-cent drop in economic output, but a continuation of strong economic growth and job creation for the next decade. Every taxpayer earning less than $80,000 will get a tax cut of at least $300 to offset what the government correctly assumes will be the result of companies passing on some of the carbon tax in higher prices.

Australia’s proposed carbon tax is about the same as British Columbia’s, but higher than the $15-a-tonne tax Alberta imposes on some companies. It’s less comprehensive than B.C.’s tax, which applies to fossil fuels everywhere, not just big emitters. But it does roughly follow the B.C. commitment to recycle money from the carbon tax to lower taxes on individuals. It’s not the “broad-based carbon pricing scheme” vaguely proposed by Canada’s Council of Chief Executives, since the Australian scheme hits the industrial emitters.

The Australian scheme does show political courage. It also grasps the essence of any serious attack on carbon emissions – that a price has to be put on these emissions.

Any other approach is bound to fail. Regulations and subsidies, the chosen means of the Harper government, will be an expensive failure, as they have been when used elsewhere. But then this government remains indifferent to climate change, unlike our Australian cousins.

* Retrieved from http://www.theglobeandmail.com/news/opinions/opinion/australias-pm-shows-political-courage-on-climate-change/article2099056/

* color and emphasis added by the blogger