It’s almost two years since the Gillard government’s Clean Energy Act was introduced and the Abbott government is about to re-introduce legislation into the Senate as it seeks to repeal the carbon tax today.
This will be Prime Minister Tony Abbott’s third attempt to deliver on his election promise and repeal the carbon tax. Crucially however the new Senate, which comes into effect on July 1, will be the ones to deal with the legislation – so Abbott clearly thinks he’ll have more success with the new senators than he did with the outgoing ones.
Leader of the Palmer United party, Clive Palmer said today he would announce his party’s final position on the carbon tax on Wednesday. The PUP senators hold the balance of power in the Senate come July 1.
But while Australia prepares to do away with the Clean Energy Act an influential group of global policy makers led by former US treasury Secretary Hank Paulson and former New York Mayor and founder of the Bloomberg media empire Mike Bloomberg have founded an organisation called “Risky Business” with carbon pollution and industries which produce it in their sights.
Writing an opinion piece in the New York Times over the weekend Paulson compared climate change to the US housing bubble which caused the Global Financial Crisis and said that policy makers are,
making the same mistake today with climate change. We’re staring down a climate bubble that poses enormous risks to both our environment and economy. The warning signs are clear and growing more urgent as the risks go unchecked.
This is a crisis we can’t afford to ignore. I feel as if I’m watching as we fly in slow motion on a collision course toward a giant mountain.
He advocates putting a price on “emissions of carbon dioxide – a carbon tax”.
Paulson believes we need to do this both for the health of the planet but also to avoid an economic catastrophe.
“We’ve seen and felt the costs of underestimating the financial bubble. Let’s not ignore the climate bubble,” he said.
But Paulson’s view that the climate consequences are both vitally important to and intertwined with the economy appear at odds with Abbott who said in Canada recently,
I’ve always been against a carbon tax or an emissions trading scheme because it harms our economy without necessarily helping the environment.
Not so according to Paulson who hasn’t moved too far from his Republican Party roots in advocating a market based solution and notes that,
A tax on carbon emissions will unleash a wave of innovation to develop technologies, lower the costs of clean energy and create jobs as we and other nations develop new energy products and infrastructure.
This is an important debate for Australia to be part of and while it is natural for Abbott and his Canadian counterpart, Stephen Harper, to want to protect local energy industries by lining up firmly against global initiatives such as “Risky Business” and a global push to stop banks from funding the coal industry Abbott and Harper risk putting Australia and Canada outside the debate.
Today the Mineral Council of Australia has today released a report arguing that the coal industry “is under attack from a well-organised, well financed, and sophisticated network of international environment groups waging a divestment program”.
But as much as we want to rage against conspiracies to end coal, the reality is that with a US EPA proposal to cut carbon emissions by 30% in 2030 from 2005 levels in the wind this is emerging as a US lead global push – Paulson and Bloomberg could be the thin end of the wedge.
Under the EPA emission reduction proposal it estimates 19% of US coal generation capacity will be uneconomic and could see more US thermal coal hitting export markets while the US ups its gas power usage.
However most US coal exports are metallurgical coal and Ernst and Young global mining leader Mike Elliot told Business Insider the mooted regulatory changes would “tip a few [mining companies] over the edge” and mines are more likely to shut rather than look to new markets.
Which brings us back to the carbon tax and the Risky Business initiative. If drastic climate change policy in the US is going to put a dagger through its already struggling coal sector then Australia needs to join the conversation on order to ensure both a seat at the table and an orderly transition to what seems an inevitable global push.
Risky Business will release a report on the economic costs of climate change inaction this week.