One would expect to have gotten used to stupid claims, poor evidence and laughable arguments in relation to a carbon price by now, but there still remains the capacity for surprise at just how witless some participants can be.

Overnight it was ACCI executive Greg Evans attacking the Greens in the Financial Review for the crime of potentially accepting a low starting carbon price on the basis that it would increase over time — something that would “turn the screws on the Australian economy,” Evans complained, purporting to speak on behalf of “business”. “They still want an outcome that will force massive change on the economy.”

Well, um, yes, Mr Evans. That’s sort of the point. And perhaps you’d prefer if we just got stuck into it right away – none of this “ramping up” shilly-shallying.  Bizarre.

We’re in danger, it seems, of confusing ends and means in the debate over a carbon price. And not the sort of confusion that is on display in the Coalition, where the “means” of direct action is primarily about the “end” of trying to pretend the Coalition takes climate change seriously, with Greg Hunt stuck with the role of the insufficiently large figleaf for the climate denialism of Nick Minchin, Tony Abbott and others.

Here’s a quick primer on the policy challenge of climate change in Australia…

Adaptation

Barring a sudden, massive and entirely implausible global economic change, climate change is occurring and likely occurring faster than previously projected. Australia, which will suffer the impacts of climate change earlier and on a larger scale than other developed countries, can’t do anything to stop it. So there is a major task in preparing to adapt to the impact on Australia of climate change — impacts that are already happening in the Queensland tourism industry, for example. Given we don’t know the precise nature of the impacts, although we can be fairly clear about which sectors and which regions will be affected more by some impacts than others, the best adaptation mechanism is a sovereign wealth fund that will give future generations more fiscal resources to respond to climate change impacts than they will otherwise have. Rather than try to second-guess where and how climate change will harm the Australian economy, let’s give our kids and their kids greater means to respond when they’re confronting the impacts themselves.

Some may disagree about a sovereign wealth fund and think we can start preparations now to mitigate impacts and adapt. Fine — let them make their case. Others may support a sovereign wealth fund, but for reasons unrelated to climate change (Malcolm Turnbull is the most recent to propose we start channelling revenue from the resources boom into a fund). But adapting to the inevitability of a significantly warmer planet is a key step in climate change policy in Australia. And that includes ensuring we have a plan for dealing with the impacts of climate change on our Pacific neighbours, since they’re our (and New Zealand’s) responsibility. Currently our policy is to throw a little bit of money at them in exchange for shutting up about the need for stronger global emissions targets.

Improving the chances of an international agreement

Australia’s only hope of forestalling seriously damaging climate change is a strong international agreement to curb emissions. That’s mostly out of our hands, but we increase the chances of such an agreement if we ourselves demonstrate a willingness to take hard decisions about reducing emissions. This is where “direct action” fails most demonstrably, since it is clear such a policy will see an increase in emissions, not a cut, and just confirm our international reputation for dragging the chain on climate action. And in such a context, our current 5% target is inadequate — maybe seriously inadequate — for convincing other nations that we’re serious about reducing emissions. It needs to be increased, perhaps substantially, and we need a serious emissions abatement policy to demonstrate good faith to the world.

Minimising the costs of decarbonising

At some point in the future, possibly half a decade, possibly not until the 2030s or later, the sheer need for global self-preservation will see a strong international agreement established to curb emissions. As one of the biggest per capita emitters, Australia has a much bigger task of decarbonising its economy than other developed countries. Our addiction to carbon, fuelled by plentiful coal and policy laziness, has been decades in the making and will take years, maybe decades, to even fall to the levels of other developed countries. The longer we wait to start the process of decarbonising, the costlier and more severe the process will be in order to meet any international obligations. We also face the prospect that at some point, possibly sooner than we think, major trading partners such as the Europeans may decide our emissions-intensive exports need a carbon tariff to ensure we’re not obtaining a competitive advantage from our inaction on emissions.

In this context, the 2000s were a wasted decade when a gentler, easier transition to an economy with merely average levels of carbon dependence could have started — although of course the likes of Greg Evans appear to want to have no truck with this “transition” nonsense.

The debate over a carbon price is really only directly applicable to the issue of improving the chances of an international agreement. Whether it actually starts the process of decarbonising the Australian economy remains to be seen and will depend on the final model — the Rudd government’s final CPRS model delayed any real price signal for the biggest polluters until the 2020s.

But if you start from the reality of climate change and then work backwards to work out what we should be doing about it, the current debate looks very narrow indeed.

Peter Fray

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