Carbon Price Comes Into Effect, World Doesn't End - Not That It Will Help Labor

Australia's carbon tax commenced on July 1 and the nation's economy seems to be trundling along OK, in spite of the apocalyptic predictions of the conservative fringe who seem to think that the small (and largely compensated for) cost is somehow going to wipe out one of the few well performing developed economies. Crikey's Bernard Keane has a look at the lunatic fringe and their opponents - the pathetic rabble in the Labor government who introduced the tax (not that they would have ever done such a thing if the Greens hadn't forced them to) and are hoping the electorate will base their beliefs on evidence at the next election - Labor and the myth of the rational voter.

Amid the torrent of earnest declarations, comments and wisecracks to mark the start of the carbon price yesterday, there was a moment of bright, shining stupidity that captured the entirety of this “debate”. Radio entertainer Neil Mitchell lashed out at Wayne Swan on Twitter for noting that Whylla, contra Tony Abbott’s apocalyptic claims, remained in existence.

“Is this stuff from Wayne Swan really the level of political debate we want?” he angrily demanded. “People in Whyalla and Yallourn and similar are actually concerned for their future. This reaction is offensive to them.”

It’s apt that we’ve reached the point where the mere assertion of a fact, and one as anodyne as the continued existence of a town, should be deemed by a media figure (albeit one whose job description is to be professionally offended on behalf of his audience) as “offensive”. The carbon price has always been a fact-allergic debate. I speak not so much of the senility of the anti-carbon tax protesters with their hilarious signs and deep anger at a world that won’t stop changing on them. Nor of the proud leadership of the assertion-based community by News Limited, with its decreasingly trusted newspapers.

It goes back further than that, to the original Kevin Rudd policy which was, let us not forget, a truly wretched concoction the development of which demonstrated all the faults that eventually killed that government.

To cover politics in that period was to hear, ad nauseum, the dulcet tones of Penny Wong averring “can I say, we think we’ve got the balance right” for a policy that in effect delayed any action on decarbonisation until the 2020s courtesy of a series of cave-ins to rentseekers, while Labor devoted itself to the twin, and incompatible, goals of trying to both win Coalition support for the package and split its opponents on the issue. When, finally, the policy was abandoned in the face of a crude but effective campaign by Tony Abbott, and Rudd’s fortunes slumped, it was no more than his government deserved for a deeply cynical approach to an issue it had portrayed as the greatest moral challenge of our time.

That his successor promptly ensnared herself in the same issue (LOL citizens’ assembly) and then smashed her credibility to CO2-molecule sized pieces with her post-election reversal was every bit as much just desserts for the women who’d lobbied Rudd hard to dump the issue and run.

As if taking his lead from his opponents, Abbott’s approach has been every bit as mendacious and more. Climate action is the issue par excellence on which Abbott has exemplified his political trademark, a tendency not so much (as Gillard is often accused) to believe in nothing as to believe in everything, occupying all possible positions on an issue, leading the Coalition’s primary advocate of a carbon tax to become its most dogged opponent. But that reversal was merely the platform for an extended campaign of wild overstatement. Abbott’s predictions of the end of Whyalla and other centres and various industries remain unwithdrawn, although some of the metaphors he has deployed have, rather in the manner of Maxwell Smart’s “would you believe” in the face of an incredulous villain, been replaced with softer versions as time has gone on.

With such examples from their political leaders, voters have followed suit. Voters are irrationally convinced that what is in effect a modest carbon price will have grotesque impacts on the economy, far beyond those occasioned by, say, the financial crisis. According to Essential Research, more than half of voters believe the carbon price will increase fuel prices “a lot” when it will have no effect at all. Around 40% believe it will increase grocery prices “a lot”. Nearly a third think it will increase unemployment a lot; one in five think (contrarily) it will increase interest rates a lot.

We’re not talking about the idiot fringe here waving “Bob Brown’s Bitch” placards and likely to die decades before the most serious impacts of climate change are felt. These are real, normal voters, with apparently functioning brains.

The Labor plan — or more correctly the Gillard plan — is that in the face of evidence that the carbon price has lifted unemployment or interest rates or the price of bananas, such voters will abandon their prejudice and look anew and sympathetically at the government. In aid of such a magical transformation, the government is running a campaign at almost election-level intensity, with the Prime Minister’s press staff spending the last 48 hours churning out media alert after media alert. The government will also be aided by a likely further fall in inflationery pressures that will see CPI remain almost flat, while fuel prices may even fall further.

But voters won’t change their minds at all, and certainly not in the time between now and the next election. For one thing, this sort of change, if it occurs, takes a long time: despite the fact that the GST is now firmly embedded in the Australian economy, 30% of voters still think it was a bad idea. That’s after more than a decade.

But, worse, the Labor fantasy is based — irrationally — on the idea of a rational voter. This is less than ever a plausible view of democratic Australia. We’re decreasingly willing to let facts influence our views of public policy. We regard the economy through a lens of our partisan beliefs, so that Liberal voters see only economic misery and financial hardship. We think we’re doing it tough financially even as we travel overseas. We’re convinced many multiples of asylum seekers are arriving than ever set foot here. We refuse to accept the copious evidence that our incomes have risen far more quickly than prices in recent years. We filter information out that doesn’t accord with our views. If that leaves us with no information at all, that’s no problem.

The cliché that you’re entitled to your own opinions but not your own facts thus appears decreasingly relevant. Indeed, not merely are you entitled to your own facts, it’s right to be offended, Neil Mitchell-style, at anyone offering contrary information. To be contradicted by someone is damn near an attack on your freedom of speech. The irrational anger that motivates some climate denialists to make threats of death and injury to scientists is only an extreme example of the fact that many of us now feel entitled to our own facts.

Perhaps it’s why everyone is so “offended” now. Offence is an entirely subjective state, one unable to be contradicted by any smart-aleck quoting evidence.

Labor’s plan to turn its fortunes around is a fantasy, a fact-based fantasy when the real world relies on make-believe. We’ll spend the next couple of months establishing that. Then it’ll be back to square one. Back to where Labor was in February.

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Green Day: Australian Carbon Tax Passes Senate

SP at TOD ANZ notes the passage of Australia's carbon tax bill - Oz Carbon Tax Passes Senate.

The Australian "Carbon Tax" has been passed in the Senate and will become law. It remains to be seen if Tony Abbott, should he get elected, follows through with his hubristic and dogmatic threats of repealing the law.

The Greens are understandably pleased.

Mining interests and The Australian have predicted this will trigger the imminent demise of the entire Australian economy, even though the more likely threat is due to financial problems in Europe. Piers Akerman (hat tip Deltoid) dredges up the old Dark Ages analogy to describe the horror that is about to befall us all at the hands of the "Green Cultists" who, for some unexplained reason want to rain doom on us all.

I guess we all have our own favourite falling sky to fret over...

The SMH also has a report - Senate passes carbon tax.

The Gillard government declared victory for a "historic economic reform" today after the Senate finally passed a carbon tax - laws that have created political havoc for four years and have been debated for more than a decade. The government won the historic vote in the upper house 36 to 32.

Labor and the Greens combined to pass the 18 "Clean Energy Future" bills just after midday, to applause from the packed public galleries.

Finance Minister and former climate change minister Senator Penny Wong said that, on the Labor side of politics, "we accept the science, we accept the need to act [on climate change], and, like John Howard and Malcolm Turnbull, we accept the science and the advice that putting a price on carbon is the best way to reduce emissions."

A $23 a tonne carbon tax will now be paid by about 500 high-emitting companies from next July, with about half the revenue to be returned to households in the form of tax cuts and increases in pensions and family payments, to compensate them as electricity generators pass through the cost of the new tax.

Another $9.2 billion over the first four years of the carbon pricing scheme will be paid to high-emitting industries with overseas competitors not subject to a tax. They will receive up to 94.5 per cent of their emission permits for free.

The carbon price is designed to meet the emissions reduction target endorsed by both major parties of at least 5 per cent by 2020, compared with 2000 levels. Labor is now promising to cut Australia's emissions by 80 per cent by 2050.

Next the ABC's take - Carbon tax passes Senate.

Earlier, directly following the vote, there was glee from the Government and Greens and dismay by the Opposition who were first out of the Senate doors to voice their protests. ...

They were followed closely by the Greens, when leader Bob Brown prefaced his remarks "from the grim to the grinning".

Senator Brown says today is "a green letter day" that will "echo down through the ages". "The great debate on this legislation is over," he said, vowing the legislation will never be rescinded despite threats by Opposition Leader Tony Abbott to do so. People 50 years, or 500 years, from now will thank us for doing this. This is a vote for Australian householders, economic planners and ecologically sound business, as well as the Great Barrier Reef, Ningaloo, the Murray-Darling Basin and 700,000 property owners on our coastal margins."

Environmental crusader former US vice-president Al Gore said on his website "the voice of the people of Australia has rung out loud and clear". He praised the efforts of Ms Gillard in shepherding the legislation through, saying "as the world's leading coal exporter, there's no doubt that opposition to this legislation was fierce".

The SMH has a roundup of some of the reactions - Climate groups welcome carbon tax.

Climate action groups have hailed Parliament's approval of a carbon tax while warning it is just a first step.

"At last we can begin the long game of catch-up towards more progressive international players on reducing our carbon emissions," Greenpeace spokesman Dae Levin said shortly after watching government legislation clear the Senate today.
While the vote was important, Ms Levin said it was critical not to lose sight of what still needed to be done to protect the community from polluting industries. "This is really just a first step," she said.

Greenpeace is urging the government to drop the $12 billion worth of subsidies provided to the fossil fuel industry. The Australian Conservation Foundation said the new laws would make the big polluters pay. "Industries that do want to contribute to creating a cleaner and healthier future for our children and grandchildren now have a financial incentive to find new, cleaner ways to do business," foundation chief executive Don Henry said in a statement.


The Australian Solar Energy Society said today's vote was a major step forward for the renewable energy industry. "We are finally penalising pollution and rewarding clean energy," chief executive John Grimes said in a statement. "This will deliver substantial investment in solar power and position Australia as a solar nation."

The Investor Group on Climate Change, comprising industry superannuation organisations with $700 billion in funds under management, said the legislation would provide greater regulatory certainty and investment opportunity. "Passage of these bills will provide a platform for future investment in renewable energy and low-carbon technologies," chief executive Nathan Fabian said. "It is in the interests of investors that it remain in place to maintain a certain regulatory environment."

OxFam Australia said the federal government had taken a first step in helping the nation catch up to others on tacking climate change. "The passage of this legislation is a historic shift in direction for Australia that will help build trust with other countries and momentum towards the critical United Nations Framework Convention on Climate Change negotiations in Durban, South Africa, later this month," executive director Andrew Hewett said in a statement. ...

The Australian Geothermal Energy Association said the legislation would boost the industry. "The carbon pricing framework and clean energy fund will hasten the development of geothermal energy projects here in Australia," chief executive Susan Jeanes said. "Geothermal energy is the great hope for the future supply of low cost, emissions free, baseload energy around the world over the coming decades and beyond." ...

Clean energy sources will be able to compete on a level playing field with emissions-intensive sources with the passage of the tax, the Clean Energy Council said. The peak body representing Australia's clean energy sector said Australia was now doing its part to tackle the threat of climate change. "Our industry has been calling for the right policy environment and a carbon price is a crucial part of that," council chief executive Matthew Warren said. "The establishment of the Australian Renewable Energy Agency and the $10 billion Clean Energy Finance Corporation will give emerging technologies the boost they need to prove their potential as mainstream energy sources. "The clean energy sector is poised to unlock billions of dollars in investment that will provide employment for tens of thousands of people."

The peak energy efficiency body says the legislation will save Australian homes and businesses over $5 billion a year. "A carbon price will actually help businesses, by giving them the certainty they need to invest in changes that are long overdue," Energy Efficiency Council chief executive Rob Murray-Leach said.

And finally, Crikey's Bernard Keane has a look at the driving force behind the legislation - It’s the Greens’ day, anyway you look at it.

It’s done. A carbon price, of a fashion, a poor one, so weak it needs to be bolstered by an extensive array of taxpayer spending, passed the Senate at 12.44. The journey embarked on by Julia Gillard on 24 February, which has seen her government and her leadership hammered mercilessly, is mostly over.

The vote passed as expected, last minute efforts by the Coalition to thwart a vote defeated by the Labor-Greens majority. The public gallery — from where Greg Combet watched proceedings — cheered an earlier procedural vote; the final vote went through with a decidedly anticlimactic silence. Opposition senators keen to delay proceedings had to settle for getting up and leaving the chamber after every vote, forcing the maximum period between divisions.

At deadline, the opposition were still trying to prevent the Bill titles being read by the Senate clerks.

This is the package that Labor promised it wouldn’t deliver before the last election, and one that has far more “direct action” than the package agreed by Malcolm Turnbull in 2009. And it comes nearly four years after both parties went to the 2007 election promising Australians an emissions trading scheme. It’s a reform John Howard, Kevin Rudd, Brendan Nelson and Malcolm Turnbull all failed on.

Even Julia Gillard, who’ll go down in history as the woman who managed to achieve what any number of male leaders couldn’t, didn’t particularly want it. Instead, it was the Greens who dragged Labor back to do what it had promised and then resiled from. It’s their day, having seized on the opportunity afforded by a minority government, adeptly exploiting the hung parliament delivered by Labor’s ineptitude.

Much of the post-election commentary on the Greens focused on whether the responsibilities of the balance of power would destroy them as it destroyed the Democrats. By becoming part of the process from the start, rather than only being played in at the death, the Greens managed to shape the package to a form likely to appeal to their base, which was always suspicious of “market mechanisms” anyway. The Greens have thus passed their first major balance of power test with flying colours.

The Coalition has had it good for most of 2011, as Labor struggled with a lack of policy detail and a rampant Tony Abbott. Now, it seems, the tide has turned against it. Its repeal policy looks increasingly problematic, and its own “direct action” policy is discredited. The only thing in its favour remains voter resentment toward Julia Gillard over her backflip on the issue.

But in the chamber today, like their Coalition forebears in 1993 on native title and like the Labor Party on the GST in 1999, the opposition looks a party stranded by ideology and opportunism on the wrong side of history.

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Australian Carbon Tax Law Introduced To Parliament

The Australian Parliament has commenced debating the new carbon tax law (dubbed Australia's Clean Energy Future - nice title !).

The debate isn't highlighting anything new - the opposition thinks the world will end when it is introduced, the government and greens think it an essential step forward (which is true, though it doesn't go far enough) and the media is by and large producing almost no useful analysis of the various claims being made.

Still - it should go through regardless - the only interesting question is will Malcolm Turnbull tell Abbott to get stuffed and cross the floor to vote with the government. Fingers crossed.

The Climate Spectator has an article on a PwC report into low carbon growth - Down to business on carbon.

The sudden evaporation of a goodly portion of the federal opposition's sitting members on Tuesday as the Prime Minister began introducing the bills of her government's Clean Energy Future package might betray a lack of consensus on carbon pricing among Australia's politicians, but it seems big business is well and truly present on the issue. A new major global report has found that the world’s largest listed companies are increasingly embracing climate change policies, regardless of – and even in spite of – broad-ranging uncertainty in politics. The 10th annual Carbon Disclosure Project (CDP) Global 500 report, put together in conjunction with global accountancy firm PwC, has examined the carbon reduction activities of the world’s largest listed companies through an in-depth analysis of 396 of the world’s largest companies, and has found that 68 per cent have climate change at the heart of business strategies, up from 48 per cent in 2010.

The report, Accelerating Low Carbon Growth, which is due to be released Wednesday, also shows a significant rise in the number of companies reporting reduced greenhouse gas emissions as a result of various emissions reduction activities (45 per cent, up from 19 per cent in 2010). A correlation was also established between higher stock market performance over time, and representation on CDP’s Carbon Performance Leadership Index (CPLI) and the Carbon Disclosure Leadership Index (CDLI). Companies with a strategic focus on climate change provided investors with approximately double the average total return of the Global 500 from January 2005 to May 2011.

CDP's Director for Australia and New Zealand, James Day, said the results highlighted that, despite all the debate in Canberra, emission reductions are being made in large companies throughout the world.

And the SMH notes the carbon tax plan will allow polluters to buy permits from abroad (and that the Abbott alternative plan is hopelessly impractical) - Abbott plan 'would double carbon cost.

TONY ABBOTT has described the carbon tax as ''the longest political suicide note in Australian history'' and a ''completely pointless exercise'' because it would allow Australian companies to buy some greenhouse gas emission reductions overseas.

But the Australian Industry Greenhouse Network - which represents mining and manufacturing industries - said it agreed with the federal Treasury that Mr Abbott's plan of achieving 5 per cent emission reductions domestically would at least double the cost, whether done with a carbon price or through his proposed ''direct action''. ...

But Michael Hitchens, the chief executive of the industry network, said if Australia wanted the cheapest way to cut emissions, ''we should have full flexibility to purchase international units''. ''We understand from Treasury modelling that the cost of abatement might double if we try to achieve the full abatement domestically. We think those figures are about right,'' he said.

Treasury modelling found that domestic-only reductions would cost an average of $69 a tonne between now and 2020, compared with $29 a tonne under the government plan, which allows some overseas permits. The Coalition has budgeted $15 a tonne in its ''direct action'' plan and says this is capped.

Rob Oakeshott, who with fellow crossbenchers Andrew Wilkie and Tony Windsor will ensure the bills pass the lower house, told Parliament the Coalition's plan did not make sense because it assumed ''the ongoing ability to buy a product [greenhouse abatement] at one third of its price''. …

The former Coalition leader Malcolm Turnbull said he had not yet decided whether to speak on the bills, which will be voted on in the lower house on October 12. He said the Gillard government scheme had ''a lot in common'' with the Rudd government's emissions trading scheme, which he had agreed to pass.

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