Monday, 11 July 2011

John Spalvins on the Carbon Tax

At last the Gillard Government has released the details of the carbon tax and we can get on with it.  Of course it's complicated.  The country's 500 largest polluters will pay $23 per tonne of carbon emitted and this cost will flow through to the wider economy in all sorts of puzzling ways, for which some people will be compensated in ways sometimes just as puzzling. 

Leaving aside the technical details of the tax and the compensation package, about which some industries are still bleating while others are relatively relaxed, it is interesting to read the comments of former Adelaide Steamship Group Managing Director John Spalvins.  Spalvins was giving an interview to mark the 20th anniversary of Adsteam's sinking under $7b of debt.  After some gratuitous pot-shots at the Gillard Government, here's what he has to say about the carbon tax.

He said several former senior US executives were bemused about Australia's introduction of the tax. "When I am in the US -- I spend three months at least each year -- if you raise the issue of carbon tax and carbon emissions, it is a non-event. They can't believe what we are trying to do -- by taking the pain and the suffering first," he says.

"Even if you say it is an issue, why should we 22 million people lead the world of six to seven billion people, and what difference does it make if we do?"

I'm sure Julia Gillard won't be seeking economic advice from a man who lost his company $7b.  Nonetheless he sums up in a pithy way the three great fallacies peddled by those who stand to lose money in the transition to a low-carbon economy.

1. "Even if you say it's an issue..."
Enough with the climate change skepticism!  The science is clear that it's happening, and why.  There are varying views on how fast, and how drastic, the change will be.  The doubt is solely in the minds of those like Spalvins who have a vested interest in inaction.

2.  22 million out of 7 billion
Carbon tax opponents make a great deal out of our smallness and hence insignificance on the world stage.  Our 22 million people make us the 50th most populous nation in the world, with about one three hundredths of the world's population.  However, our 400,000 tonnes of annual carbon dioxide emissions make us 16th in the world, and we are 12th in emissions per capita.  We are world leaders in emissions, why not be world leaders in cutting them?

3.  "Why should we lead the world?"
Being a proud Australian I would be delighted to think we were leading the world in this or any other worthwhile endeavour.  Sadly we are not.  The European Union (responsible for 14% of world emissions) has had an emissions trading scheme in place since 2005.  New Zealand (the world's 72nd largest emitter) enacted its scheme in 2008.  And while the USA, the world's second largest emitter, has no national scheme it has a number of regional ones which between them cover areas with far more population and emissions than Australia.  We're lagging behind, people!

I'm with the Greens on this one.  I'd like to see more, and a faster transition.  However, the political difficulties are real and what we are about to have is at least a start.

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