Sunday, 10 April 2011

Untangling the Carbon Tax Debate

Reading my Weekend Australian this week has really highlighted for me the complexity and confusion generated by the current debate around the Carbon Tax.  Of course being the home of climate change denial and front page for big business interests, The Australian has no incentive to simplify and clarify the debate.  The more confused and anxious people feel, the more likely they are to either disengage or vote no.  So, although my audience is a lot smaller than theirs, let me try to close the gap.  Of course I don't know all that much about it, but perhaps that will help.

There are basically three parts to the debate about the Carbon Tax.  In The Australian these are thrown together in a blender so that they  come out as a kind of thick soup.  Let me try to seperate them out.

Part 1 - The Evidence for Climate Change
The debate is still going on, fuelled by the likes of The Australian, about whether the climate is actually warming and if it is, whether this is caused by human activity or is just a result of natural fluctuations.

The problem with this debate for someone like me, with very limited scientific knowledge, is that my decision will never be based on an examination of the evidence.  The evidence is incredibly complex, and drawn from a number of highly specialised branches of science.  It is, in fact, as complex as the earth itself.  For me, and those like me, it comes down to a question of faith.  Who do I believe? 

My reasoning is as follows.
  1. It is quite clear that the majority of those working on the science believe that global warming is happening and is caused by human activity.  This is clearly evidenced by the Intergovernmental Panel on Climate Change.
  2. Of course it is posible that the majority is wrong.  It's happened before.  However, to those who talk about vested interests and even a conspiracy I say - most of the money in the world is tied up in the economy as it now is.  The wealthy and powerful of the world have not much to gain from climate change being a reality, and a whole heap to lose.  The conclusion of the majority of scientists is contrary to their interests.  The conspiracy, and the vested interests, are more likely to be on the side of the deniers.
Hence, while holding doubt in my mind, my step of faith is clearly in the direction of acepting human-caused climate change as a reality.

Part 2 - The Desirability of Limiting Climate Change
If we accept the idea that humans are causing climate change, the second debate is essentialy that between those who want to prevent climate change, and those who want to focus on mitigating its effects.  These are often presented as alternatives but in fact it's possible to do both.

This is not a technical debate so much as an economic one.  There is no doubt it is technically possible to limit climate change - we just need to reduce our carbon emissions below a certain level.  The question is, at what cost?  And is this cost worth the effort, as opposed to measures which help us to mitigate the effects of change - for instance, by moving people from areas which become unlivable, shifting agricultural practices to match changed rainfall patterns, etc?  Or, to put it another way, what is the appropriate and most cost-effective balance between prevention and mitigation?

Once again, this is an incredibly complex question.  The kind of cost-benefit analysis required to answer these questions is so complex, involves so many factors, and relies on so many detailed predictions of uncertain costs and events, as to be almost meaningless.  It's like the accountants answer to the question, "what's two and two?" - "what do you want to make it?"  Or the economists answer to the problem of opening a tin of soup on a desert island - "let's assume we have a can opener..."

To my way of thinking the answer to this dilemma is that we should start moving in the direction we want to go.  If we wait for certainty, for the data to become clearer, we will be too late.  We need to start building low emission technology.  We need to start shifting to a low carbon economy.  We need to start developing our systems for drought and flood mitigation.  One of the things that pushes us in this direction is that there are other reasons to do this than climate change.  Fossil fuels are finite.  Hunger and thirst are present realities.  People are already being displaced by droughts and floods.  We need to take our heads out of the sand and start to respond, even though there is a risk we will get some of it wrong.  The best way to learn is to start trying.

Part 3 - Is the Carbon Tax the best option?
We can get to this final question only if we have worked our way clearly through the first and second.  Part of the strategy of obfuscation practiced by many of The Australian's comentators is that they mingle all three together - "global warming isn't happening, and in any case the European emissions trading scheme isn't working and India and China won't pull their weight because they need economic development".  All this leaves us confused and disempowered. 

So, if you have worked your way through the first two questions and come to similar cnclusions to me, you then need to move on to the third which is, what policy measures will work?  This is a technical question about public policy and how to use state mechanisms to influence private and corporate behaviour.  The Carbon Tax, as the central plank of the response from both Labor and the Greens, is based on the idea that the best way to reduce carbon pollution is to make people pay for it.  Companies and individuals will then have an incentive to find ways to reduce this cost.  This policy will work if the cost of pollution is greater than the cost of mitigation.  The complexities of global markets, and the uncertainty around if and when other countries will implement similar systems, makes the answer unknowable at this point.  So my point in relation to Question 2 applies - lets get started, and keep working on it as we go.

Of course, this is not the sole response proposed by any political party in Australia.  All parties agree on measures (many of them more costly) like rebates on installation of solar systems, mandated renewable energy targets, grants for research and development, and tougher pollution regulations. 

It's legitimate for us to argue about the right mix of policies.  We should argue in order to reach the best solution.  What is not legitimate is to pollute this argument with the smokescreen of the two prior questions.


Marion said...

If you are a True Believer in AGW you shouldn't be at your computer. Turn it off, in fact turn everything off and get out and tend your vege garden.

Jon said...

"Use less" is not the same as "use none".

Marion said...

Ah but who is doing the measuring? How much is "less" ?

Jon said...

Yes Marion, difficult questions. My thoughts are firstly that the big differences are at the macro level rather than the individual level, and the changes will come through changed technology and practices in things like manyfacturing, transport and power generation. While individualising the issue to households is good because it makes us mindful of what we do, our contribution is small.

Secondly, of course there have been lots of detailed calculations made, eg by the IPCC (, on what needs to be done to mitigate climate change including emissions targets and scenarios. Complicates stuff!