The Punch: Putting a price on carbon is just the beginning

Gillard’s recent decision to cut funding to renewable energy projects clashes with a growing consensus that carbon pricing alone will not move Australia towards a renewable energy future.

Senior finance columnist Ross Gittins is the most recent to take aim at the shambles that is Gillard’s climate strategy, writing that “imposing a price on carbon emissions won’t solve the problems most of the affected climate programs were intended to tackle.”

While it is revealing enough that a respected commentator with over 30 years’ experience disagrees with Gillard’s blinkered focus on carbon pricing, even more telling is the fact that his voice is just one of a choir.

Critics are amassing from discrete positions to dispel the concept that market forces alone are enough to inspire a technological and economic revolution, especially within the short – and shrinking – timeframe we need.

The current issue of The Monthly features a comprehensive argument by Global Change Institute research fellow Guy Pearse that:

While a carbon price is necessary for an effective climate change response, it doesn’t guarantee one. As the CPRS debacle reinforced, a carbon price needn’t require emission cuts in Australia, nor reduce fossil fuel dependence, nor stop coal export emissions being doubled.

Climate commentator Leigh Ewbank concurs, writing recently that:

[Gillard] has been led to believe that carbon pricing alone is enough to decarbonise our economy, when in fact, it’s carbon pricing that is the ultimate complementary measure. It will take a range of policies to drive renewable energy deployment, clean technology uptake, and energy efficiency improvements.

Ewbank’s position echoes the view long held by climate solutions think tank Beyond Zero Emissions. “Carbon pricing is the wrong mechanism for driving renewable energy down the cost reduction curve,” executive director Matt Wright stressed in October last year. “While successful renewable energy deployment policies require upfront investments they ultimately achieve economic efficiencies though scale.”

Recently, organisations such as the Climate Institute, the Australian Youth Climate Coalition and the Australia Institute have stepped up and got behind those already challenging the narrow, carbon price-only policy adopted by the Labor government, thus creating a veritable framework of opposition.

The Climate Institute’s CEO John Connor conceded that a carbon price “is only part of the job in reducing our pollution, growing cleaner energy solutions and helping global efforts to avoid increasing climate extremes.” The AYCC agreed, saying:

A price on pollution without investment in renewable technologies will leave Australia in a mess. The sort of mess that arises when you begin the move away from coal but haven’t developed the infrastructure to meet the country’s energy needs.

And as for esteemed think tank the Australia Institute - for an unambiguous exposition of their position on the topic, one only needs to look at last week’s Climate Spectator:

Rather than help inform the public that a carbon price has an important, but limited, role to play in driving behaviour change, the government has instead inflated expectations about what a carbon price can achieve as an excuse to avoid scrutiny over the design of its existing complementary measures.

It would be irresponsible to pretend that those critical of the Gillard government’s unbending faith in carbon pricing are entirely unanimous in their full views on the topic.

For example, Gittins maintains that a carbon price “may be the most important thing we need to do,” before conceding “but it’s not the only thing.”

Ewbank on the other hand argues that “the hierarchy between carbon pricing and so-called complementary measures should be reversed.” Meanwhile, Friends Of The Earth is about as anti-carbon pricing as you can get, claiming that it is simply “an attempt to make climate demands palatable to business and push the costs onto the rest of us” (sic). 

Nonetheless, there is constructive power in that which unites rather than divides renewable energy advocates. There is no better indication of a sound consensus than the disparity among those who subscribe to it.

There are a bevy of reasons so many people are coming to the conclusion that a carbon price alone cannot drive Australia’s transition to renewable energy. These broadly fall into three categories. Firstly, action on climate change is—unfortunately—a low priority for the electorate.

Any policy that reduces economic competitiveness or increases electricity bills will face fierce opposition from the fossil fuel interests (recall the fate of the mining super profits tax) and Tony Abbott’s Coalition. This makes effective carbon pricing a difficult task, no matter how many enthused speeches the Prime Minister may give. 

Secondly, by its nature, carbon pricing does not necessarily provide the energy market with an incentive to turn to renewable sources. Instead it drives them to look for the cheapest alternative to emissions-intensive coal—most likely the fossil fuel gas, if around $10 or $20 per tonne. This is hardly a positive basis from which to invest and develop a sustainable future. 

Which brings us to the third point: a carbon price does not build the enabling infrastructure required to accommodate clean technology.

For instance, electric vehicle recharge stations are imperative if people are to start driving electric cars, but recharge stations do not directly offset emissions in the way choosing to drive an electric car does.

It is a sad irony that the infrastructure required to get a renewable economy into gear is dangled over an abyss of government negligence.

If Gillard et al can explain how these concerns won’t affect the effectiveness of Labor’s climate strategy, let them enlighten us, please. 

Whatever the reason and whichever the political leaning, those who oppose Gillard’s narrow carbon-price only policy are contributing to a growing critical force, one that the Prime Minister ignores at her peril.

- By Alice Body, freelance writer and volunteer at Beyond Zero Emissions

Source:

The Punch