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A fair dinkum carbon tax debate will show why Tony Abbott is no idiot

By Chris Lewis - posted Monday, 28 March 2011


After all, it was Garnaut, a longstanding promoter of free trade and the economic opportunities provided by a booming Asia, who hardly saw the writing on the wall about rising greenhouse gas emissions with his past policy ideas and analysis.

While I too support economic liberalism (within reason), which means that we cannot deny the right of countries to enhance their economic prosperity, one would be naïve to suggest that a carbon tax was going to make that much difference in terms of reducing greenhouse gas emissions.

In addition to the above evidence that shows how domestic consumption magnifies the developed world's carbon footprint, Australia seeks to maintain its high standard of living by making the most of coal exports to the world, particularly to Asia.

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So why do I have more faith in Tony Abbott than say Ross Garnaut?

First, Ross Garnaut offers a flawed faith in free trade with little regard to the loss of industry from the developed to the developing world. Hence, he still rejects calls from the manufacturing sector for carbon tariffs to help local industry, and argues that government should spend around 10 per cent of revenue raised from a carbon tax to boost spending on low-emission technologies.

Second, while Abbott is hardly opposed to freer trade or further measures to ensure that the Australian economy remains competitive, he does express interest in various concerns about the national interest when relevant evidence emerges.

One has only to note recent concern by Abbott and the Coalition that Australia may need to amend its anti-dumping regime to help ensure that our markets are not distorted by goods subsidised by foreign governments, a stance which reaffirms my belief that he is no fool driven entirely by a blind faith to ideology.

With Abbott astute enough to take account of various concerns, including by Liberal and National members about the extent of foreign ownership of agricultural land, he is likely to listen to evidence that shows that the loss of energy-intensive Australian industry offshore may indeed increase global greenhouse gas emissions.

And there is a lot of evidence to show why the new obsession with a carbon tax may be less important than keeping industry here and adopting other reforms to reduce our own greenhouse gas emissions.

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During February 2010, a Chinese report (a two-year study involving 570,000 people) found that agriculture is responsible for 43.7 per cent of China's chemical oxygen demand (the main measure of organic compounds in water), 67 per cent of phosphorus and 57 per cent of nitrogen discharges. While fertilisers and pesticides have played an important role in enhancing China's productivity, a Greenpeace report indicates how its overuse of nitrogen fertilizer was adding to water pollution and greenhouse gas emissions. With China producing 24 per cent of the world's total grain output, it did so using 35 per cent of the world's nitrogen fertilizer.

China, by 2007, was also responsible for 51 per cent of all steelmaking carbon emissions with the International Iron and Steel Institute indicating how that nation emits more greenhouse gases in steelmaking because it uses less scrap and burns more coal. It was also noted that the steel industry is the world's third biggest polluter in terms of greenhouse gases after the chemical and cement industries, and that only 39 per cent of the world's steel output was in countries that signed the Kyoto protocol cutting emissions.

And with the World Bank observing that Chinese industries use 20 to 100 per cent more energy per unit of output than their US, Japanese and other counterparts, China's government in 2010 ordered that more than 2,000 highly polluting, unsafe or energy inefficient plants to shut down within two months. The notice from China's ministry of industry and information technology covered 18 industries including steel, paper, cement and dyeing.

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About the Author

Chris Lewis, who completed a First Class Honours degree and PhD (Commonwealth scholarship) at Monash University, has an interest in all economic, social and environmental issues, but believes that the struggle for the ‘right’ policy mix remains an elusive goal in such a complex and competitive world.

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