Wake up Australia

The ultimate strength of a successful liberal democracy is indeed the willingness of its people to extensively debate important issues so that sophisticated policy solutions can emerge to meet a variety of economic, social and environmental needs.

Australia’s record over the past 50 years has proven that progressive policies are possible, as indicated by widespread public support for less industry protection and a more multi-ethnic population, notwithstanding some ongoing concern about freer trade and the ability of different cultures to integrate.

But Australia may struggle to achieve a balance between economic and environmental considerations, arguably the most important issue of the 21st century.

In recent weeks, whether petrol prices or energy intensive industries should be subject to the carbon trading scheme has become a potential source of difference between Labor and the Coalition: although Malcolm Turnbull stated in 2007 the need for transport fuels to be included so that “consumers will be given greater incentive to improve the energy efficiency of their transport choices”. On July 7, Brendan Nelson stated that Australia should not commence emissions trading until other countries had a start date, despite the Howard government supporting the introduction of such a scheme from 2012.

Once again, it appears that short-term political gain is the immediate goal of the Coalition as it exploits concerns about higher petrol prices to boost electoral fortunes: although its stance does represent diverse opinion about the issue and will help expose the weaknesses of any policy approach seeking to balance economic and environmental concerns.

Though a July 1 Newspoll indicated a 61-25 per cent support-opposition ratio for an emissions trading scheme, 42 per cent supported petrol being excluded although 46 per cent wanted petrol included even if higher prices resulted in other energy sectors.

But the debate needs to be honest to inform the public over the next few months. After all, the US National Oceanic and Atmospheric Administration notes that carbon dioxide in the atmosphere has reached 387 parts per million (ppm) in 2008, with the level increasing by an average 2.1 ppm since 2000 compared to 1.5 ppm between 1970 and 2000.

And while Andrew Bolt argued in the Herald Sun (June 27, 2008) that there was no point to a carbon trading scheme that penalises pollutors - because some studies suggest that ocean levels are falling and global warming is not occurring - while arguing that Australia cannot make a difference because it produces just 1.5 per cent of global carbon dioxide emissions, can we really afford to ignore the issue?

Even both US presidential candidates now accept majority scientific opinion urging action to minimise the possibility of rising sea levels threatening nations; declining ice sheets; warmer oceans; fewer forest areas reducing the earth’s capacity to soak up excess carbon dioxide; and higher temperatures hindering the ability of some nations to produce enough food for a growing world population (including Australia).

In any case, can Australia afford to miss the growing importance of carbon trading given that the global carbon market more than doubled to $64 billion in 2007, with the European Union Emission Trading Scheme worth about $50 billion?

Though there are many issues to deal with - such as the possibility that some companies will exaggerate their emissions and pressure governments to set a higher cap so they can easily meet targets without actually cutting pollution, and that too many permits may lead to a carbon price collapse (as evident in Europe in 2006) - a carbon trading scheme may in time challenge the value of markets for oil, natural gas, electricity and coal.

Australians should consider the German example where both economic and environmental gains have been achieved, although there will certainly be higher prices for consumers from renewable energy, especially in the short-term.