What a backflip! Deniers become climate prophets

This was published 9 years ago

What a backflip! Deniers become climate prophets

THE cream of Australian business, overnight it seems, has undergone a transformation from climate change sceptics into environmental warriors. Each day summons forth a new prophet, proclaiming the virtues either of an emissions trading scheme or a carbon tax; or as Tony Abbott put it in the election campaign, a ''great big new tax on everything''.

If you find this perplexing, given the vehement opposition from the business lobby in recent years, fear not, you are not alone. Just imagine how Tony feels.

Australia and the US are the laggards.

Australia and the US are the laggards.

BHP Billiton's Marius Kloppers started the ball rolling last week, advocating a hybrid system, with a carbon tax and a limited emissions scheme; an idea quickly endorsed by business lobby groups.

Then followed the amazing spectacle of Andrew Forrest grudgingly backing Kloppers. And, in an even more astounding development, TRUenergy chief Richard McIndoe advocated the introduction of an emissions trading scheme.


How has it come to this? A cynic may conclude that with the Greens being elevated into a powerful new force in Parliament, business leaders see a carbon price as inevitable.

Before we delve into the complexity of the whole thing, let's just dispose of a ''great big myth about climate'' in this country.

The big lie, almost universally believed by Australians, is that after the failure of the Copenhagen summit to come to an agreement, we would be foolish to go it alone.

The argument goes: Why should we impose a huge cost on our export industries and standard of living when the rest of the world has walked away from taking action on climate change?

Wrong. The rest of the world is doing something. Australia and the US - the two heaviest emitters of carbon per head of population - are the laggards.

In fact, 32 countries now have emissions trading schemes. We're not talking obscure countries in exotic locations. Try Britain. Think all of the European Union.

Even China, the world's biggest polluter, has imposed stringent undertakings on itself to cut emissions by 2020.

The workings of emissions schemes and carbon taxes - and the debate about which is superior in reducing carbon dioxide emissions - is devilishly complicated.

But the unavoidable truth is that both will increase the price of conventional energy sources. Green policies in Britain are expected to add 33 per cent to the cost of electricity by 2020. That's for consumers. For industry, it could be as much as 43 per cent.

Complexity and cost have enabled our leaders to create a smokescreen so thick that it threatens to completely hide the carbon.

So which is superior, a trading scheme or a tax? Both attempt to achieve the same end but through different means.

A trading scheme sets a quantity of carbon dioxide emissions and allows the market to work out the price. A carbon tax, on the other hand, sets a price and allows the market to determine the quantity of emissions. Most economists believe a trading scheme is more efficient. And if such a scheme were global, Australian coal producers could buy credits from those replanting rainforests in other countries. That's not to say a carbon tax wouldn't work. Where both schemes get messy is the extent of exemptions and compensation for emitters and consumers.

Kloppers last week proposed an ETS for the handful of power companies but a carbon tax on just about everything else, with three notable omissions. Transport (including motorists), agriculture and export industries were to be exempted from the tax. These three just happen to be the three main sources of pollution. Under Kloppers's proposal, that pretty much puts the entire burden of paying for carbon emissions on a handful of companies in the power industry.

Kloppers apparently has deep personal convictions about the need to shift towards more environmentally friendly fuels. But he also has a responsibility to act in the best interests of his company.

So too does McIndoe - whose company owns the Yallourn power station, a big emitter of carbon dioxide - a staunch opponent of the Rudd government's trading scheme. This week he ridiculed Kloppers's proposal, labelling it as ''clumsy'', instead calling for, you guessed it, a trading scheme.

If that's left you gobsmacked, you've forgotten that McIndoe extracted the promise of billions of dollars in compensation from the ETS compromise thrashed out by Kevin Rudd and Malcolm Turnbull when they were leaders.

That wouldn't be available if only a handful of companies - as opposed to the 1000 or so that are our biggest carbon polluters - paid for emissions. Prepare yourselves for more gymnastics, for the games have yet to begin. At least it's progress, of a sort.

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