NOW that Australia’s emissions trading scheme has been placed in deep freeze, on the back burner or whatever other analogy you might care for, talk is turning to an alternative market-based system to cut down emissions.
Donna Green and Liz Minchin at newmatilda make a decent stab at suggesting we should have plumped for a carbon tax all along.
Compared with an ETS, a tax is a simpler, more effective, faster solution for cutting emissions. That’s why so many people and major financial institutions — from renowned economists like Jeffrey Sachs and Nobel laureate Joseph Stiglitz to world-leading scientists like NASA’s James Hansen — all back a tax over trading.
Minchin and Green’s analysis of the issue runs over similar ground to that long-argued by the Carbon Tax Center in the US, which also thinks a tax would be faster to implement, encourage more predictable energy prices and be harder to fiddle than cap and trade.
I wonder though if this emerging debate will have a similar effect to the one artificially generated by climate change sceptics over the strength of the scientific evidence backing action on climate change?
Minchin and Green say a tax would be quicker to implement than an ETS. We should remember though that it took the best part of 15 years for Australia to introduce another consumption-based tax, the GST.
What this debate really adds up to is further delays and while this policy uncertainty is certainly harming the renewable energy sector, the same can’t be said for the resources sectors.
In the meantime, why not fiddle around with one of the only policy success stories to come out of the climate change box in recent years – the 20% by 2020 Mandatory Renewable Energy Target?