Paying for your emissions

Although this sounds difficult and bureaucratic, it is actually quite possible and practical, with such methods being commonly used for third party proof of timber sustainability and for proof of origin of organic food. It does, however, add cost, may be complex for businesses to implement and, in the case of “low-emissions” certification, may open the door to claims of fraud and associated lack of reduction in emissions.

However, such potential problems of fraud may be less than those already thought to have arisen from the current Kyoto carbon-offset schemes. For instance, in 2007 a report from Openeurope (PDF 1.51MB) found that the greatest number of world carbon abatement credits had been created by building industrial plants to remove chlorofluorocarbons (CFCs) from industrial gases. Evidence exists that the production of these greenhouse CFCs was increased in order to create carbon-credits from the gas’s subsequent destruction.

It is to be expected that there would be public opposition to such a Carbon Consumption Tax, because of its “up-front” obvious charges. However the cost of a carbon emission-source tax or for an ETS, would similarly be ultimately borne by the taxpayer, it just wouldn’t be as “visible” to the consumer. On the other hand, if AGW is an important issue, perhaps there is an environmental advantage in people seeing (and paying for) the actual emissions resulting from what they buy. This would provide information to enable better purchasing decisions and so drive real emissions reductions.

For all its apparent complexity, perhaps a Carbon Consumption Tax based on Embodied Emissions data may be the lowest cost, most effective way to reduce emissions while not selectively impacting Australian jobs, industry and the rural sector. Additionally, extra funding for low emissions technology could be raised without causing carbon-leakage, and without the associated job and investment losses.