On July 1, the carbon tax will come into effect — hitting about 500 of the nation’s top polluters and triggering a complex web of indirect impacts.
Earlier this year, Bond University teamed with Crikey to work out what this will mean for Australia. The plan was to give readers an insight into the country’s new green economy — how it will work, what the impact will be and who will pay the price.
As part of a three-month investigation, 25 students waded through sustainability reports and Treasury documents, sifted through rhetoric and political spin and qualified their findings with researchers and industry experts.
Some industries will be affected more than others. The potential impact on mining, electricity and energy is well documented, with these industries making up the bulk of the 500 companies to be taxed directly. Waste will also become a major issue under the tax, with 190 of the “Misfortune 500” companies operating within the waste-disposal sector.
However, profound impacts will also be felt in industries whose emissions won’t be taxed directly. Companies with high Scope 2 emissions (generated largely through electricity consumption) will pay the price through increased electricity costs.
Small businesses and farmers have cause for concern — some dairy farmers claim it could push them out of the industry altogether, while small steel producers are worried about competing with well-compensated corporations and overseas rivals.
The cost of living and housing will also rise — although, with government benefits to offset this and most households predicted to profit or break even under the tax, the effect of these price rises will be more about changing consumer spending habits than putting families out of pocket.
Some industries even stand to benefit under the tax. Telecommunications companies are promoting video and phone conferencing as ways to reduce the emissions impact of business travel. The renewable energy sector stands to receive a large chunk of the profits of the tax — good news offset, in part, by a pre-tax revival of fossil energy sources.
Finally, there are a few industries whose forecast impact is surprising. For example, there has been very little media coverage of the impact on universities, but Murdoch is estimating a $2.1 million spike in its electricity costs — which could have flow-on implications for staffing, classes and research.
Researching the carbon tax has been a tricky process for the students for a few reasons. Although information on the tax is abundant, the topic is a difficult and complex one, requiring a level of political and economic understanding that made it initially inaccessible for many students. Several weeks needed to be spent researching the tax, its structures and the current economic climate, as well as compiling fact sheets and glossaries for acronyms, abbreviations and enviro-corporate jargon.
The students quickly realised that predictions of any kind are difficult and dangerous — many industries and companies were reluctant to estimate the impacts at all (for commercial and other reasons) and those who did qualified by acknowledging that the real effects may not be apparent until after the tax’s introduction.
Finally, the issue is a difficult one because it involves so many conflicting and politically loaded claims. Behind the glossy sustainability reports and government statements, a much messier argument is playing out, with industry voices, unions, lobby groups and politicians all squabbling about what the real impact is likely to be.
Many of the difficulties our students faced are symptomatic of wider problems underpinning the way issues such as the carbon tax are debated in the public sphere. The base level of knowledge required to debate an issue like this in a meaningful way involves quite detailed understanding of the complex nature of the tax (or, more accurately, the emissions trading scheme with a fixed introductory price), the environment and the economic climate surrounding its introduction.
Without this kind of understanding, public responses to such a proposition can be reduced to gut instincts or uncritical reactions to political spin and PR campaigns.
In effect, what we’ve attempted to do is demystify and depoliticise the issue to bring you an insight into the carbon tax and what it will mean for Australia. It is by no means a comprehensive insight — the topic is too broad to pin down in one report — but we’re really proud of what the students have achieved. They’ve had some support from myself and Roger Patching, but the angles, scope and research are all their own — their collective best guess at the way industry, the economy, household budgets and our way of life might change post July 1.