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Put up a sticker and you've done your bit

By James Allan - posted Tuesday, 29 January 2008


If you are serious about cutting carbon dioxide emissions, you need to make them more expensive. So you can tax them or you can create a system to ration such emissions. Alas, rationing schemes not only discriminate against new entrants and provide rent-seeking opportunities to those operating the system, they don't really work. We don't set up a complicated alcohol or tobacco rationing system with tradable rights to drink or smoke. We tax these products. The EU carbon trading scheme hasn't worked and won't work. It's more of the form-over-substance charade.

You see, if you approached the problem in terms of taxing carbon dioxide, it would become too obvious just how high the costs would be of achieving a 70 per cent reduction (or even half of that). One can't help noticing that despite endless rock concerts, declarations and meetings of the great and the good, very little in practice has been done and global emissions continue to rise.

Meanwhile, the one obvious, clearly beneficial policy that we could adopt in Australia, namely to build nuclear power stations, dare not speak its name in polite Labor circles. This Government won't even sell uranium to India, even though nuclear power is the only remotely plausible way that enormous country will slow the increase of its emissions.

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You see, it doesn't matter that India is a democracy, a huge and successful democracy. It hasn't signed the Nuclear Non-Proliferation Treaty, old boy. And rather than weigh the costs and benefits of what to do and then make a hard call, we're going with the bumper-sticker brigade on this one.

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First published in The Australian on January 22, 2008.



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About the Author

James Allan is Garrick Professor of Law at the University of Queensland.

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