It’s been revealed! Labor has a secret plan to bring back a carbon tax, according to News Corp.

It’s so secret, in fact, that Bill Shorten announced it publicly a year ago. As reported on News Corp’s own news website way back then, Labor wants to establish an emissions trading scheme for carbon, with a price set by the market. We even knew that Greg Combet was working with the opposition to design it.

And an ETS, of course, is not a tax (although given News Corp’s fondness for tax-dodging, it’s unsurprising its journalists don’t understand the difference).

The coverage reveals the deep irony that News Corp, along with Fairfax, is currently sponsoring a “national reform summit” to advance the cause of reform at a moment when, by common consensus, we are governed by a parliament that is incapable of undertaking sensible debate and policy change.

An emissions trading scheme, which encourages firms to work out their own most efficient way to meet their carbon abatement responsibilities and rewards firms that innovate and invest by allowing a trade in emissions permits, is the best, most economically rational (and most capitalist) way to address the challenge of curbing carbon emissions.

A carbon tax — dubbed by Tony Abbott in 2009 as “the intelligent sceptic’s way to deal with minimising emissions” — or an ETS with a price set by the government is the next best way, but not as good as a floating price ETS. And both are much better than the Renewable Energy Target, which imposes abatement by regulation, or direct commercial investment by government — as per the Clean Energy Finance Corporation — that risks displacing commercial investment.

Worst of all is government handing money to industry merely to do things they were already going to do and pretending that somehow buys carbon abatement. That’s why there isn’t a single supporter of the government’s “Direct Action” scheme — a scheme that Malcolm Turnbull correctly noted was devised by climate denialists.

We wonder if that fairly simple contrast will make it onto the “national reform summit” agenda.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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