There is an eerie silence around carbon pricing, even amongst people who are aware and concerned about climate change. Fortunately the silence is not total as Labor are proposing an ETS in its election campaign. Many seem to be focussed on other ways of addressing the issue and seem to have given up on using a price signal to drive and underpin the solutions they are advocating.
In some ways this is not surprising as a reasonably good carbon price was dumped by the Australian government in 2014. The pro-carbon lobby had a big win which was naturally very discouraging for low-carbon advocates. Despite this and other setbacks there are many good reasons why we should be pursuing a carbon price vigorously.
Our climate crisis is primarily a socio-political problem and is deeply rooted in our social and economic systems which put private profit ahead of the needs of people and planet. It will only be resolved by fundamental change. An effective carbon price, especially if applied across a number of major economies, will significantly change the economy and our society’s values and is an important part of the overall transformation that is needed.
For example, an effective carbon price will end the fossil fuel subsidies that continue to distort the market and ensure that the industry will keep producing until the last possible moment. It is inevitable that companies that are required to make money for their shareholders will continue to do so while market incentives are there to make it easy. This will extend the climate crisis further and slow the transition to a post-carbon economy.
Many people have put their hopes in technical solutions such as the eventual displacement of fossil fuels by renewables. It is indeed exciting that renewables are becoming more and more competitive and are giving fossil fuels a headache. While the growth of renewables is already disrupting the energy market and will continue to bring about change it is primarily a technical solution and will not have the wide-ranging transformative effect of an effective carbon price.
Whilst the transition to renewables is inevitable it would be significantly accelerated by a carbon price. And the transition would be significantly smoother. Without a price signal the transition will be very difficult as the rear-guard actions of the fossil fuel industry will be disruptive and destructive. And the economy’s responses to the shocks of climate change and transition away from carbon will be much less predictable without a carbon price to smooth out the bumps and give us some degree of certainty about the price trajectory of carbon in future decades. Some industries are recognising this and many oil companies are asking for a carbon price.
Fossil fuels have been a vital source of energy and have powered many wonderful developments in science and society. They are a fundamental driver of our current civilisation. Now they are threatening our existence. An effective carbon price will do much more than reduce emissions and smooth the transition to a post-carbon economy. It will slow the consumption of the world’s resources, reduce the polluting effects of our industries and very importantly, reduce the income inequalities within nations and between nations that threaten our security.
An effective carbon price will give us space to reconnect with the natural world and return to a more collaborative relationship with the planet that many of us have lost over the past century of rapid development and industrialisation. These are some of the transformations that are badly needed to enable us to pull back from the brink.
It is important that we demand a carbon price as well as the many other approaches we are advocating for in order to address climate change. It is the change that will bring the quickest results and make all the other changes happen more quickly and more smoothly. It is the measure that will bring about the fundamental changes that will enable a transition to a post-carbon world.
We can demand a carbon price, almost as a human right – we have a right to pay honestly for the carbon emissions embedded in every purchase we make. Instead we are being forced to pay through the disastrous consequences of greenhouse emissions on our health and wellbeing and on the health of our planet’s life support systems.