it’s important to take prudent precautions against credible threats. Climate change is real. Mankind does make a contribution. Tony Abbott – ABC Illawarra – 16 March 2011. The Independent Australian fully concurs. But how? The mainstream media rarely points out the incongruent positions taken by the ALP and the Coalition. The ALP is supposed to believe in government intervention and regulation and the Coalition to believe in market and price mechanisms.
Yet it is the ALP who is introducing a carbon tax i.e. deterring people from consumption by a price increase. This is a simple mechanism, easily administered and has much to commend it. Price works; solid increases in power costs have led households to reduce electricity consumption by 6% over five years. But the price increase is also important as a signal. It brings saving energy into the public discussions and the mainstream media. Four people I know who have just had houses built, or are in process of doing so, have energy saving at the top of priorities. In this respect a lower carbon tax would have been more politically prudent, stirring up less opposition, but still achieving associated benefits.
Unfortunately an ETS later comes into play, which will be a farce, as pointed out in the earlier post The Emissions Trading Scheme is a Fraud (02/10/1).
The Coalition greenhouse gas abatement policy is to spend $10 billion up to 2020 on direct action. Government expenditure has a poor record of delivering value, as the coalition is pointing out in discussions on the Clean Energy Fund which is part of the ALP package (think pink batts and other energy initiatives). The chances of Coalition policy delivering a 5% reduction in emissions are negligible, but the target is set so far out as to not be of electoral concern.
Australia is a comparatively wealthy country and should lead the way. A carbon tax, regulation (e.g. building and appliances), cautious spending on innovation could be a mix which could achieve the desired target if immigration is reduced.
(Australia’s population is increasing at 1.6% pa due to bipartisan policy support for high immigration. At current levels of consumption that is near a 15% increase in demand by 2020 on its own.)