We face, in coming weeks, a political tipping point in how Professor Ross Garnaut's Climate Change Review report will be publicly received and debated.
The Garnaut Climate Change Review draft report will be issued publicly on Friday, July 4. A couple of weeks after that, the Government will issue a Green Paper, which, according to Climate Change Minister Senator Penny Wong, “will outline Government's thinking informed by a range of matters” including the report, advice from within the government and consultations with business and industry.
Garnaut believes transport fuels should be included in a carbon emissions trading scheme. He told the Canberra Times earlier this month that it was “Kevin Rudd's and Penny Wong's job to decide what they can manage, but I can't see any good reason for excluding transport”.
A carbon emissions price of between $20 and $40 per tonne - an average expectation of where the market price might settle - would increase the price of petrol by between 5 and 10 cents per litre.
Neither major party is now committing itself on whether motor fuels should be included in a carbon emissions trading system. The recent public furore over increased petrol prices has spooked them both.
But Malcolm Turnbull (Canberra Times, June 25, 2008) sensibly suggests that one option is to “keep the carbon price across the board, including liquid fuels, but reduce the excise as you impose the carbon price”. In other words, leave the market price unchanged, through government forgoing the excise tax.
This makes economic and psychological sense. If the carbon emissions trading system is to have any real economic effect, it has to be universal. Once exceptions start to be allowed, everyone will want special treatment and the integrity and credibility of the system will be lost. The burden on those industries left in the system will be proportionately higher, or the system will be watered down so far as to simply become window-dressing.
The purpose of carbon trading is to kick-start a process of real reduction in how we consume fossil fuels, using market forces as the generator of beneficial change. We need an economic jolt to begin to restructure our economy towards non-emitting renewable energy technologies, across the board - in industry, transport, our homes and workplaces. There simply is no time now to tinker with half-measures.
The informed public knows this, but disturbingly we are not included in Senator Wong's list of stakeholders to whom she will listen when considering Garnaut's recommendations. Those inconvenienced by change will always shout louder than the majority - and that means all of us - who stand to benefit from it.
The coal industry has enormous lobbying and decision-corrupting influence over the political process, and I fear it may succeed in diluting Garnaut's recommendations to a level at which they will have no real effect on society's expectations and behaviour.
The recent furore over petrol price increases came at the worst possible time for intelligent public debate of the Garnaut recommendations. Public panic gives the coal industry an enormous opportunity to scaremonger and to push phoney solutions such as conversion of coal or gas into diesel fuel, and generation of hydrogen fuel.
All these so-called solutions emit greenhouse gases as coal and oil do. The only real solution is the fastest possible move to a renewable energy-based economy.
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