The Greens’ Proposal
The Greens have proposed an interim 2 year carbon tax, as a transition to
carbon trading. Starting at $23 per tonne this year, rising to $24 the
following year. It would be simpler than the CPRS, and unlike the CRPS
would not involve tradeable permits, or the use of offsets, but as Greens state
“The scheme would operate using the proposed CPRS administrative framework
to ensure a smooth start”. The proposal originally comes from the Garnaut review,
the report by free market economist Ross Garnaut which led to the CPRS.
The Greens have proposed a carbon tax to deal themselves back into climate
negotiations with the government, rather than fight for solutions that
would actually work. Given the scale of the problem, their carbon tax
proposal is remarkable for its timidity, and that is likely to be made
worse by negotiations with the Labor government. However timidity is not
the only problem, a carbon tax will make getting solutions that work more
Carbon taxes are market mechanisms which work on the same basic mechanism
as carbon trading – price signals. The Greens are proposing exemptions for
“trade exposed emissions intensive industries”, just as with the CPRS. This
would include exemptions for companies like Alcoa, which has just done a
deal with Loy Yang power to keep polluting for the next 26 years. This is
because the Greens want to support Australian companies against
international competitors. But being Australian companies, does not make
their emissions any less harmful to the climate. Climate change doesn’t
What’s wrong with Carbon taxes?
Even if Alcoa were included in the Greens carbon tax proposal, it would not
solve the problems with carbon taxes. Should the polluters pay (what
amounts to a nuisance tax), or should they stop polluting? If government is
serious about stopping something dangerous, it bans it. DDT was banned
because of its effects on the environment. So is asbestos. Why allow
companies to pay a tax and continue to destroy the planet? Companies will
continue to add to greenhouse gas emissions even with a carbon tax, if it is
still profitable to do so. We need to regulate absolute limits on carbon pollution.
Carbon taxes are always less effective than regulation. For instance taxing
old incandescent light globes would reduce their use, but banning them
stops them altogether – providing new ones free would be better still.
Taxing the car industry or petrol, might lead some poor people to stop
driving, but mandating electric cars run of renewable energy alongside
massively expanded public transport would make a real difference. Taxing
the carbon in aviation fuels, would make flights more expensive and reduce
numbers flying, but replacing flights with high speed rail, would be more
Carbon taxes are unfair.
The rich person in first class on a flight uses 5 times the space of
someone in economy, but even if they paid five times the tax, a price rise
would matter less to them. Carbon taxing, like carbon trading allows
destructive behaviour to continue for those who can afford to pay. The same
is true of taxes on cars, or coal-fired power. Petrol price rises can leave
people stuck in the suburbs without transport. Coal-fired electricity
producers will pass a carbon tax on to consumers while continuing to
You can’t build a movement based on unfairness
We need a mass movement to force our rulers to act to stop climate change.
People will not join our movement if it means they will be stuck in the
suburbs without transport, or if they are cut off electricity. They will
not join our movement, even if they just think these things are likely to
A carbon tax would be just as vulnerable as carbon trading to being
labelled a “big new tax on everything”. This is already having an impact.
The right will continue to use the slogan as a way of convincing ordinary
people that action to stop climate change will hit them financially. A
carbon tax is an unfair flat tax like the GST – we can’t build a movement
on that basis.
Won’t it raise money that can be used for climate action?
The Greens say that their proposal “Results in a surplus of $2.97 billion
… which could be directed towards climate mitigation and adaptation
infrastructure” But not only does this not come close to the sort of money
that is needed to seriously address climate change, in actual practice
budgets do not work as they suggest. Governments constantly move money
around from one budget to another. All taxation becomes general revenue,
which can be used for anything government decides matters, at this point it
is more likely to be used for the war in Afghanistan than emission
If government was serious about addressing climate change it could get far
more money by raising corporate tax and the highest individual tax rate
back to where they were in the 1980’s – corporate tax would go from 30%
back to 40% and the highest tax rate from 45% back to 60%.
Isn’t a small carbon tax better than nothing?
No. Carbon taxes can actually give government an interest in continuing
emissions. This already happens with cigarettes. Cigarette taxes are high
enough to stop some people smoking, but not high enough to stop everyone
smoking and consequently for the government to make no money.
If people think the government is already acting with carbon taxes or
carbon trading, they will be less likely to see the need to protest for
real climate action. The climate movement must demand what needs to be
done, rather that try to come up with “solutions” that are acceptable to
those who run our world, but that will not work.
Instead of a carbon tax the Greens should be demanding “No New Coal”, a
stop to the Alcoa-Loy Yang deal, and direct government investment in
renewable energy and public transport.