AT THE heart of both Ross Garnaut’s interim report and the Rudd government’s Green Paper is the proposals for an Emissions Trading Scheme (ETS). The ETS is presented as the only option in the mainstream debate over how to deal with global warming.

Under an ETS, businesses that produce large amounts of carbon dioxide must purchase permits to pollute. Permits are distributed, or auctioned, by a government authority and traded as a commodity on the finance market.

Garnaut’s report was welcomed by all influential sections of the environment movement and the broader left. After years of Howard government denial and inaction, spokespeople from the Greens, the ACTU and Greenpeace all lauded the report as a “wake up call”. Criticism was restricted to Garnaut’s proposal to compensate emissions intensive industries.

Rudd’s ETS design is meeting far stiffer opposition. On current modeling, 30 per cent of permits will be given out for free, including up to 90 per cent of the permits required by the highest polluting industries. The fossil-fuel industry is being promised cash payments as “compensation”.

Greens climate spokesperson Christine Milne said the paper showed the government “had its foot on the break and accelerator at the same time” and had bowed to pressure from the “greenhouse mafia”. GetUp! labeled the proposal an “omissions trading scheme” and highlighted how the paper waivers from Garnaut’s recommendations.

But this approach, which posits Garnaut’s “good” ETS against that of Rudd, is mistaken. Garnaut’s entire scheme is constructed from the logic that climate change can be dealt with without any challenge to powerful interests or fundamental restructure of the economy. The Green Paper, with its explicit concessions to industry, is merely the conclusion to this logic.

The fact that major polluting infrastructure projects, such as the new coal fired power station in Victoria, have been given approval since the release of Garnaut’s paper demonstrates the “business as usual” message being sent through the ETS debate.

Across the world ETSs have failed to curb emissions and have resulted in increased profits for the industries most responsible for climate change. To accept an ETS means accepting neoliberalism, the idea that handing power and responsibility to “the market”, or major private companies, will result in positive social outcomes.

Both papers are heavy with arguments to justify the place of neoliberal ideology at the centre of policy making. This approach was thoroughly rejected at the last election by Australian workers fed up with Howard’s neoliberal attacks.

Garnaut celebrates his role as a key adviser to the Hawke government through the initial process of neoliberal restructure in Australia, which saw privatisation of major government assets, deregulation and de-unionisation across the economy.

Praise for Garnaut is often accompanied by a demand for further government action, such as the investment in renewable energy, public transport and energy efficiency measures we desperately need. But this demonstrates either complete ignorance or willful blindness to the neoliberal content of Garnaut’s proposals, which explicitly counter-pose the idea of substantial public investment in clean infrastructure to the development of a functioning ETS.

Garnaut argues that his scheme will, “build on the national reform agenda” in the energy sector, one “of national competition policy and progressive privatisation”.

He argues for the sale of existing government electricity assets and for complete price deregulation. He warns that “Australian distrust of markets” could lead to a “second guessing of the market”. Public investment must be restricted to funding for research and its “commercialisation” to avoid distortion of the ETS.

Public investment is similarly excluded from the Green Paper. For example, it argues an ETS will encourage the trend towards “small and medium cars”, while public transportation is not discussed as an alternative option.

In fact the only concrete investment commitment in the Green Paper summary is the $500 million allocated in the current budget towards “carbon capture and storage technology”, or “clean coal”. The models outlined in both papers are completely reliant on the development of this non-existent technology and cite its adoption within almost every concrete example of how an ETS will deliver change.

The introduction of an ETS cannot be a mechanism for progressive environmental reform; it is a neoliberal attack. It will increase prices and hardship for working people, deliver even greater power to companies capable of speculating with permits and facilitate further privatisation. It is imperative that the grassroots environment movement takes a stand within this debate, coming out strongly in defense of the interests of workers and demanding immediate government action to mitigate climate disaster.

By Paddy Gibson

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