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No walking away on climate again

Sydney Morning Herald

Saturday February 26, 2011

JULIA GILLARD'S announcement on Thursday that the government would legislate this year to fix a price on carbon came as a bolt from the blue. It follows years of botched attempts, fruitless political brawls and phoney wars over giving Australia a serious mechanism for tackling climate change. Much of Gillard's latest plan still needs to be explained. Nonetheless, this time there must be no going back.The case cannot be sustained for Australia's delaying any longer a scheme designed to cut emissions of gases that cause global warming. Since coal was first mined at Newcastle in 1797 we have enjoyed cheap energy from this dirty source of carbon dioxide, a chief driver of global warming. Coal now provides about 80 per cent of our electricity. We have become the world's highest greenhouse emitter per person.Some experts reckon Australia's recent tally of natural disasters is linked to changing climate patterns: Victoria's bushfires and Sydney's dust storms in 2009; floods devastating three states and cyclones hitting northern Australia this year. True or not, such phenomena are becoming frequent enough for the impact of human activity on climate to be quizzed. The Bureau of Meteorology cites the decade to 2009 as Australia's hottest on record. The federal multi-party climate change committee, whose report triggered Gillard's announcement, talks of unmitigated climate change "threatening our economy, our natural heritage and our way of life".The committee comprises independent, Labor and Green parliamentarians, the Coalition having refused an invitation by Gillard and Greg Combet, the Minister for Climate Change, to join it. So far the model's details are more sketchy than the one the Rudd government tried and failed to get through Parliament three times, thanks largely to an unholy alliance between the Coalition and the Greens in the Senate. The new plan would start with polluters being obliged from July 2012 to pay a fixed price (yet to be determined) on each tonne of carbon they emit. After three to five years there would be a "clear intent" to evolve to a cap-and-trade system, a market in which polluters could buy permits to produce carbon dioxide and sell them to others if they cut their own emissions.These costs would be passed on to consumers of electricity and other services produced from high emissions. The the Opposition Leader, Tony Abbott, has brandished electricity price rises of $300 a year, apparently drawn from an Australian Industry Group postulation of a $26-a-tonne carbon price. But figures on both counts are still unknown. Anyway, some power price rises cannot be all bad: the scheme's whole point is to encourage lower emissions long-term. An initial fixed carbon price has potential advantages, too. It will give the sort of certainty about change that some in the business world have been demanding, as they plan investment decisions. It will encourage serious investment in solar, wind and other renewable energy sources. And it will allow Australians to adapt to a new world order, in which the market would eventually find an equilibrium between emissions and prices.For Gillard the political stakes in seeing this plan through are high. She has had to break a somewhat foolish pre-election promise not to introduce a carbon tax because of the reality in which she later found herself, leading a minority government depending on Greens and independents for survival. She is hardly covered in glory, either, from her part in urging Rudd to take the inexplicable decision to drop his climate policy, a commitment that had helped to sweep Labor to power in 2007. She must learn from those mistakes, and fulfil her pledge to win the political debate that lies ahead.The debate will be nasty. Abbott's provocative response, with talk of a "people's revolt" against a carbon price, is sheer political opportunism. He will try to scare people on this, as he has tried to do on asylum seekers. But even Abbott's political mentor, John Howard, finally accepted a carbon-price policy after it became clear the Liberal Party had fallen behind public opinion on climate change. Abbott wrecked that bipartisanship after he took over as opposition leader 14 months ago. His coarse approach must not prevail this time.Australia has little choice about building a carbon price into economic reform. With their acceptance of the GST and water-use restrictions, perhaps grumpily at first, Australians have shown a willingness to adapt to economic and environmental change. Handled properly, and sold convincingly, there is every reason they would adapt to a carbon price, too.

© 2011 Sydney Morning Herald

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