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Carbon Tax Repealed, Hyperbole Revealed

Today the Abbott Government were, 10 months after their election, able to see the repeal of the former Labor Government’s carbon tax pass through the Senate. Finally the Coalition was able to deliver on their most solemn commitment to the Australian people in 2013. It has not been an easy road to this point for the Coalition, not just in the area of carbon pricing, but in general. Understandably then, the relief of today’s events among Coalition MP’s and Senators was palpable.

But not all political players were happy. The Greens led the way with the condemnation of the government and understandably so. It was at their insistence that the former Labor Government introduce a price on carbon in return for their support in minority government. The ALP also voiced their concerns with the events of today. Their position being that Australia needs an Emissions Trading Scheme.

As often happens when controversial things occur in politics, there was not much restraint shown in the language used to describe what happened in Canberra. Hyperbole got a real workout. Both politicians and social media indulged in making hyperbolic statements.

The trouble is, whatever your viewpoint on this, or any other issue, hyperbole does little to further your cause. It makes you look overly emotional and can turn people off your cause. Simple language without outlandish claims works best when trying to communicate serious points. Few people like feeling as if they are being preached to. It is better to feel you are part of a solution than it is that you are part of a problem.

By far the most overblown and indeed overused claim today was that the repeal of the carbon tax would doom the planet. It was said by many that our children and their children should be told it was Tony Abbott and his government who should be held responsible for the state of the planet in their lifetime. This is just plain wrong.

What one nation does in isolation will not curb or exacerbate global warming in any significant way. What the international community as a whole chooses to do, or at least the vast majority of countries, will have an impact.

What one nation does in reversing action on curbing emissions will, on the other hand, have a significant impact on their own natural environment and the health of their citizens.

This so far might sound like an endorsement for so-called ‘direct action’. It is not. That policy is incredibly expensive.

What Australia needs is an Emissions Trading Scheme, or ETS. We almost had one not all that long ago. It was not perfect, but it was a very good start. And it would have saved a lot of political trouble for multiple players in the years after it was dumped. And it would have been reducing emissions long before Labor’s carbon tax began operating.

The debate around climate change and how to tackle it will continue. And that leaves open the possibility that minds will change. The key is that emotion is largely taken out of the debate, while still being able to calmly discuss the potential consequences of global inaction.

Language Changes as Fluid as the Changes to the Tax Itself, If Not More

The carbon tax, price on carbon, carbon price, fixed price carbon reduction scheme, call it what you want has by far been the most talked about public policy decision made, with the prodding of the Greens in order for minority government support. It has been the subject of political debate ever since Prime Minister Gillard uttered those words “there will be no carbon tax under a government I lead” just a short time out from the August 2010 election. The political to-and-fro over the carbon price has been ferocious with the Opposition making their disdain for such a policy, one they once supported, a central feature of the discourse of the last two years.

Over recent months there has been much discussion and debate over specific elements of the carbon price. We’ve seen the floor price dropped so that our framework, once transitioned to an Emissions Trading Scheme, could be linked to the European Union ETS in a common carbon market.

There had been much talk and pleading from different quarters, calling for the floor price to be dropped ahead of the floating price which begins in 2015. However, we were repeatedly assured by the Gillard Government that the floor price would remain while simultaneously it seems, the government were in discussion with the Greens, convincing them that abandoning the floor price would be okay.

Then there’s also the other not so small matter of the ALP deciding to abandon plans to buy back and secure the closure of the five dirtiest coal-fired power stations.

Both these decisions bring an amount of uncertainty to the usefulness of the scheme, with these facets of carbon pricing seen to make it easier and more certain that the carbon reduction benefits of such a policy would be realised. Now, that task of reducing emissions and the hopes of raking in sufficient revenue to pay for the compensation and other benefits of the Clean Energy Future appears to be on very shaky ground. If the aims are to be achieved, they will now be done the hard way.

These moves imply that the Labor Party were worried about the policy, particularly the public perceptions of the price on carbon, which has since improved markedly. They make a government already low in confidence and in the polls publicly appear uncertain of their prospects, scared of the electoral defeat which is still highly likely, some time after July next year.

This slippery and slidey approach to the carbon tax policy has also been mirrored in the use of language by the Coalition. The same messages and implications have broken through from the altered usage of words to describe the pollution reduction scheme, as were received through the dumping of the floor price and the decision to not close down the dirtiest power stations.

In fact, the language to negatively describe the carbon tax has changed more than the policy itself.

First we had the Opposition describing the carbon price as a “cobra strike”. This characterisation said to people that the impacts of the carbon price would be immediate and deadly for certain sectors and the economy and the population more broadly, the venom spreading fast across the economy and gradually breaking down bodily (economic) organs.

Next up was the description of the carbon mechanism as being a “python squeeze” on the economy. This screams slower suffocation of the organs of the economy, but still ultimately says that the patient will die but the death might well be slower. It also gives an air of avoidability, that suffocation can be more easily overcome than a deadly poison coursing through the veins of the economy.

The latest expression to be used by the Opposition Leader is that the price will be like an “octopus’ embrace”, its tentacles grabbing hold of various parts of the Australian economy, far and wide, as well as the people. Presumably though, it’s not a Blue-Ringed Octopus as they’re poisonous.

Curiously, if a Blue-Ringed Octopus wasn’t in mind with this example, it’s the only one that doesn’t imply that death is a near certainty.

Either way, both the language to deride the climate change policy of the Labor Government and the policy itself have undergone changes, with the shifts in both sides ostensibly implying the same thing, uncertainty over their relative positions.

Government Still Emitting Mixed Messages and Potentially Leaking Revenue

Carbon pricing is happening, it’s been legislated and that legislation has commenced. The fixed price period began almost two months ago now, on July the 1st. But today things have moved forward as far as the floating price, the emissions trading scheme which will commence in just under 3 years time after the fixed price period ends. The Australian Government has today announced that they’ve reached an agreement with the European Union to link their respective schemes which means Australia joins with 30 other nations in a common market for carbon credits.

But there’s also been a step backwards from existing Labor Party carbon pricing policy, there will no longer be a floor price, that’s gone as part of the pact with the EU linking Australia and European Union countries. This new market, though heavily regulated, will be the largest carbon market in the world, but by no means does it cover anywhere near the majority of the globe and its population. The European ETS covers  just over 500 million people and Australia will add a further 22 million people living under the carbon market.

For the first 3 years of the emissions trading scheme, Australians will have access to European carbon credits but not vice versa. European businesses being able to purchase carbon credits in Australia will be allowed to occur from 2018.

Aside from the broken promise over the carbon price, the biggest point of contention since the decision was made in minority government to pursue the carbon price was over the floor price.

The floor price was instituted by the government supposedly to provide certainty to business and to avoid the price of emissions becoming too low. This price was to be set at $15 per tonne from 2015 when the market-based trading scheme will start. We were told, just as recently as last week that the floor price would happen, though reports had surfaced that the ALP were considering backing away from this element of their climate change policy.

Essentially now, the common market with the European Union will determine the price, any price it likes, and if the EU example is an indication, that price has the potential to go quite low, well and truly under the $29 per tonne that the Treasury modelling banks on for the year 2015-16. This means the revenue projections are surely under serious threat.

But Greg Combet doesn’t think so. The Climate Change Minister today said that the long-term average over the past 4 years of the European ETS has been $23 per tonne of carbon emissions. But whether that’s enough to achieve an effective price of $29 in 2015-16 alone is fanciful. This is especially so with a European economic community in chaos financially, a common market that has seen their permits go as low as single digits per tonne of carbon emissions.

Worse still, this backdown on the floor price is in effect an admission that the Gillard Government was wrong with its legislated policy direction. Rightly or wrongly, it will be construed as the government admitting that a floor price would have hurt Australia and our competitiveness and the people dealing with the flow-on costs of the scheme and that could easily have further negative implications at least temporarily for the struggling ALP.

For an administration struggling with expectations, the mixed messaging and second backflip this month doesn’t bode well in trying to run consistent messaging in areas of public policy and that just makes the government look confused and scared.

By far the biggest damage will be to revenue and that will in turn make promises much harder to deliver, though maybe they’re not too worried about that given the chances that they’ll hold the purse-strings at the start of the floating price are slim. Oh, and the fact that the trading scheme might well not be there under a Liberal Government. But who knows, it’s certainly much, much harder to repeal now.

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