Resource tax? Green new deal? Or new social contract?

Could Labor's proposed resource tax open the door for a “green new deal” or even “a new social contract” for Australians?

The EU states are already experimenting with environmental tax revenues, but as World Watch says in its Transatlantic Green New Deal analysis, governments must take care not to subsidise bad practices. Emissions trading is a case in point; and the Rudd Government's Carbon Pollution Reduction Scheme would transfer a $13 billion compensation payment from people's pockets to polluters' pockets (Stuart Rosewarne and James Goodman, “The ETS is a huge cost for almost no benefit”, The Age, December 9, 2009). By contrast, a resource tax might be used progressively as a de-carbonisation fund.

As World Watch observes much can be done:

... to rationalise current tax systems, which tend to make natural resource use too cheap and labor too expensive. Using eco-tax revenues to lighten the tax burden on labor (by funding national health or social security programs through eco-taxes rather than pay-roll taxes) would help lower indirect labor costs and boost job creation without hurting workers' interests.

The Transatlantic Green New Deal is one of several such propositions launched on the international political scene in response to the dual crises of financial meltdown and global warming. UNEP brought out a global paper, and another was published by the UK based New Economics Foundation.

The local version is the Joint Statement: Towards a Green New Deal - Economic Stimulus and Policy Action for the Double Crunch. It is designed by the ACF, the Australian Council of Social Services, Climate Institute, Property Council, ACTU, Australian Green Infrastructure Council, and Institute of Superannuation Trustees. These are familiar political personae; though the Infrastructure Council (AGIC) is a more recent arrival.

The AGIC is described as:

... a company formed by a group of industry professionals from engineering, environmental, planning, legal, financial, and construction backgrounds, working in both private and public organisations related to infrastructure ... Its members aim to deliver more sustainable infrastructure by driving market transformation through education, training, advocacy and a sustainable rating scheme for infrastructure projects.

Prominent members include the consulting firm GHD, and expert tunnel builders Snowy Mountains Engineering Corporation (SMEC).

The nation's single most powerful corporate lobby, the Minerals Council, is noticeably absent from Joint Statement signatories; but so is the Women's Electoral Lobby or similar, as well as Indigenous organisations. This lack of representation of more than half of Australian voices skews the Joint Statement with a seriously gendered and ethnic bias. In short, the Australian green new deal is uncritically framed by productivist values and tech fix responses to the “double crunch” of ecological and financial collapse.

To summarise, the key Joint Statement goals are:

• retrofitted buildings for energy and water efficiency in residential, commercial, and public sectors; assistance for low income people with household audits;
• sustainable infrastructure like public transport and freight; solar, wind, geothermal renewables; monitoring of the construction sector; and
• green industries for the manufacture of internationally competitive products and services, projecting 500,000 skilled-up green trades jobs.

The three-way accord between business, labour, and conservation, in the Joint Statement has little to say about de-commissioning big global warming players. In many ways it reads like growth all over again, and for this reason begs an in depth environmental audit. But it also falls short of a new social contract. The deal is a “job stimulus package” to build prosperity and insulate the Australian economy from future shocks. The social responsibility of miners, bankers, and shareholders, as citizens, is not addressed. (For related readings: ACTU, Green Gold Rush: The Future of Australia's Green Collar Economy (2008); and for a core Australian Green Party statement: Christine Milne, Re-Energising Australia (2007).)

For sure, the market needs to be insulated from shocks, but equally, the ecosystem and future generations need to be protected. Human health depends on a continuous metabolic exchange with clean air, land, and water. A focus on innovative production should be matched by a focus on social and ecological re-production. Thus, a green new deal mark II, might integrate the precautionary and regenerative labour expertise of women caregivers and of Indigenous land managers.

The current Joint Statement is fundamentally business as usual. Cultural differences are not acknowledged; social justice becomes an employment statistic; the worker is “social capital”; and the environment is translated as “energy efficiency”. The living web of nature that human bodies are a part of is externalised as an object “out there”, a measurable resource. In the tautological reasoning of economics, “energy efficiency” is said to have “value” because it will “reduce the $ cost of the CPRS ...”

Frankly, this green new deal looks more like a scrum than a social contract. Joint Statement recommendations are said to have “both technology push and market pull” - which means that the business sector is rewarded from both the turnover in green construction and possibly new profits from carbon trading as well. The decrease of carbon pollution and increase of “healthy green industries” is considered a “double dividend” of “natural and social capital”.

It is surprising to encounter the neoliberal doctrine of “domestic competitiveness” in a document authored by the ACF and ACTU, quote:

Australia's ambition should be to capture a quarter of a trillion dollars of industry share in what will be a global industry worth almost US$2.9 trillion dollars.

This is a clear commitment to export-led growth and free trade. But once international freight emissions are taken into account, how green will it be?

The priorities of the Australian deal are urban consumerism, manufacture, and exchange value. There is little attention to employment through natural forest and catchment restoration, despite the enhanced earth cooling that results from this kind of re-productive work. Agriculture is passed over, even though agro-industry has massive carbon emissions; and even though sustainable small-scale farm employment and clean, local, eco-sufficient provisioning are highly desirable.

In an early review of “the double crunch” paper, an Australian Greens researcher suggested that Australia needs a Green New Deal index. But measures used by ecological economists have many methodological shortcomings. The steady-state Index of Sustainable Economic Welfare (ISEW) or the Genuine Progress Indicator (GPI) are each based on the very ad hoc GDP construct. And beyond this, ecological feminists reveal the GDP, UNSNA, ISEW, HDI, and GPI to be systemically flawed by errors arising from lack of gender literacy (Marilyn Waring, “Policy and the Measure of Woman: UNSNA, ISEW, HDI, and GPI” in Ariel Salleh, Eco-Sufficiency & Global Justice 2009).

The global financial and ecological crises are often put down to “human greed”, but this diagnosis bypasses structural and cultural differences within societies and between societies in terms of international consumption patterns. Not everyone is mortgaging the earth. The key driver of both economic and ecological debt is the corporate sector - a very specific class, ethnic and gendered grouping - along with its “wanna be” mates in the global South.

Like the financial crisis, the environmental crisis is equally an effect of living on unsecured credit - an extraction from the thermodynamic cycles of nature faster than these can readjust. Moreover, if 60 per cent of global greenhouse gases are generated by industry, 20 per cent by transport, and a fair portion by agro-industrial enterprises, why target housewives about saving energy in the home? Yet this is what British Petroleum has been doing in Australia with its One Million Women public relations campaign. Given the Caribbean oil spill, BP might do better appointing these housewives and mothers to its Board.

Is it really possible to author a coherent green new deal in the absence of a new social contract? The short sighted pragmatism that dominates Australian politics contrasts with the vision of New South Wales Green Party MP Lee Rhiannon, who clearly has a new compact in mind when she writes (in an email exchange with me):

... it has to mean a lot more than jobs in renewables and a lot more than jobs with an enviro link ... We need to be talking about how work is structured, democracy in the workplace, and global wealth redistribution ... the poverty-environmental degradation link and the reasons for it being buried in the present debate ...

While many Australian trade union and conservation leaders have come to believe that capitalism can be made sustainable, it is worth contrasting their Joint Statement with the Climate Justice Movement agenda:

• leaving fossil fuels in the ground;
• reasserting people's and community control over production;
• relocalising food production and reducing over-consumption in the North;
• honouring Indigenous and forest people's rights; and
• recognising ecological and climate debt with reparations to the South.

Unlike regressive beggar-my-neighbour policies based on a national competitiveness policy, initiatives like these are long term and win-win, coming to grips with the crisis of capitalism as an ongoing systemic problem. This kind of green new deal is embedded in a new social contract; builds strong international relations between citizens across continents; respects people's differences globally; and their right to control local economies in an ecologically rational way.

A resource tax? A green new deal? A new social contract? Are our pollies shaping up for a just transition?