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Which way forwards in response to climate change?

By Tristan Ewins - posted Monday, 18 January 2010


Importantly, tax, social wage and welfare reform would have to be enacted to prevent the costs of such change “flowing on” to more vulnerable groups and individuals.

Progressive tax reform - combined with a progressively structured ETS (made possible through compensatory payments) - is also critical given that the debt from massive public investment in renewables would need to be serviced in as fair a manner as is possible.

If the Australian government does go ahead with some form of ETS, it must be so structured as to have a more progressive impact on wealth and income distribution, and access to necessities including energy.

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Towards the end of 2009, Lindsay Tanner, the Australian Finance Minister, affirmed that “low-income households will be hit around $420 annually under the scheme but will be compensated on average by $610 per year”.

The question here is why the government is not using this opportunity to do more in the interests of distributive justice.

Given that the broader tax system in Australia is in need of radical reform for purposes of distributive justice, an ETS - while not a tax - could be levied at a higher rate. By this we infer regulation ensuring a higher rate for carbon permits issued by the Federal government - and also central regulation of permit values thereafter. This is an alternative to the wild speculation some suppose might otherwise follow with the scheme’s implementation.

If accompanied by greater compensation for those on low and middle incomes (especially lower incomes), though, such reform (as advocated in this article) would comprise a “step forward” for fairness.

As Ken Davidson, writing for The Age, has noted also, if emissions permits are too cheap then there will be no incentive for corporations to make “higher cost investments” anyway.

While Davidson rejects the prospect of an ETS altogether - and a carbon tax would be more simple and potentially less volatile - there are ways of improving the proposed system.

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In the wake of Copenhagen international action is necessary

The failure of nations to arrive at a legally binding framework (via an international treaty) for emissions reduction at the Copenhagen conference shows a disturbing lack of resolve and good faith among what some call “the global community”.

Among the most pertinent of issues was the failure of the developed world to provide the necessary compensation for poorer nations to continue development in an environmentally and socially sustainable fashion. Writing for the Sydney Morning Herald, Andrew Hewitt lamented that: “The promised $US100 billion a year by 2020, aimed at helping poor countries reduce their emissions and adapt to a changing climate, is less than half the amount needed.”

The quest to eradicate poverty, here, need not be abandoned as the price of sustainability. Technology transfer is of central importance, as is funding tied to the construction of sustainable infrastructure in developing countries.

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About the Author

Tristan Ewins has a PhD and is a freelance writer, qualified teacher and social commentator based in Melbourne, Australia. He is also a long-time member of the Socialist Left of the Australian Labor Party (ALP). He blogs at Left Focus, ALP Socialist Left Forum and the Movement for a Democratic Mixed Economy.
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