When it comes to energy and carbon emissions reduction, the devil is always in the detail. So too with Australia’s plans to cut its emissions by five per cent below year 2000 levels by 2020. But first, let’s look at the big picture.
Why we need to do this
As a scientist who researches the impacts of climate change on biodiversity and other natural systems, I see an existential threat posed by global warming to our planetary boundaries. As the dominant species on this planet, we have no choice but to face up to this problem, and solve it, fully.
Will a carbon tax in Australia do this? Of course not – it is only a small piece in a very large puzzle. So why should we commit to this, and why should Australia move ahead of most of the world?
Greenhouse gas emissions from fossil fuels are a tragedy of the commons. If most nations ‘wait and see’, the commons – our atmosphere and biosphere – will be degraded, to the detriment of all people.
Without a price on carbon dioxide emissions, Australia will keep burning coal for its electricity. With an abundant and cheap supply, there is no reason to do anything else. To decide not to do this, there must be an economic justification – a trigger for change. That is what the carbon price is.
The carbon tax plan
At $23 per tonne of carbon dioxide, however, little will be immediately different. Coal will still probably be the cheapest option. So the price must rise over time – or else the carbon tax will fail to deliver.
A rising tax makes the debate about the initial price a sideshow, because businesses will plan for the future, not just for the now. A rising price with scheduled minimum gateways will make a real difference to the medium and long-term choices being made by investors (government and private sector).
Households should be compensated, because they currently have few options other than to buy what is offered. To fix this lack of choice, the energy market must also be opened to real competition. Renewables, nuclear, fossil fuels with carbon-capture-and-storage – all must be allowed to compete on a fair and level playing field. Other technology specific subsidies should be eliminated.
If we try to pick winners and ban competitors (nuclear), as we are currently doing, we risk high costs, few gains and lost time. As a nation and a leader, this is not something we can afford to get wrong.
Emissions reduction targets – it’s complicated