A price on carbon is around the corner
Australia could have an effective carbon price within five years. There are many factors pointing in that direction and CCL is one of them. Five years may seem a long time but the prize is worth it. To get there we need to keep focused, stay hopeful and be inspired by the value of the prize and power of CCL’s approach.
There are many reasons to be hopeful of achieving our goal.
- Pressure from business, finance, central banks and from other nations continues to build.
- Every week there is news about some group or other calling for some form of carbon price.
- Interest groups resistant to a carbon price are losing ground and markets are abandoning them.
- State and Territory governments are united across party lines in supporting renewables and aiming for net zero by 2050.
- A Biden presidency is becoming increasingly likely and will return the US to a pro-climate, pro-Paris Agreement administration.
- CCL’s Energy Innovation and Climate Dividends Act is attracting more support and will become a real contender under a Biden administration.
- The recently appointed European Commission led by Ursula von der Leyen plans to put tariffs on the carbon content of imports from countries that do not price carbon
- Canadian electors voted last year for parties in favour of retaining Canada’s mix of carbon prices, which includes a Federal carbon fee and dividend scheme for 3 provinces and several territories.
- Australia’s COVID response has taught us important lessons about our ability to respond to crisis, listen to science, collaborate and quickly adapt to new circumstances.
CCL has developed three new campaigns designed to build on these factors and create even more momentum for carbon pricing.
- The Climate-Smart Recovery campaign joins with many others to call for an economic recovery that also addresses climate change
- The Carbon Pricing Leadership Coalition will help build a unified group across business, government, academia and civil society
- Build the Centre will give active support to the ‘sensible’ centre in parliament, the media and political institutions
A lesson from Canada: stay focussed
Our colleagues in Canada were in a very similar position 7 years ago. They had a conservative government hostile to carbon pricing and 2 years to an election. They worked with business to build support for carbon pricing and joined the Carbon Pricing Leadership Coalition when it formed in 2015. They worked with the new Trudeau government to get carbon fee and dividend adopted in the 3 provinces and the territories that did not have their own carbon price.
Cathy Orlando, CCL’s Country Director in Canada stresses how important it was to stay focused on carbon fee and dividend in all their preparations and in their meetings with MPs. They are staying focussed now on keeping it, improving it and defending it against pushback from its opponents. Importantly, they are resisting the temptation to relax.
It may seem tempting to divert from our advocacy for carbon pricing, as Australia seems to have turned its back on it and accepted its demise. On the contrary, it is vital that we stay our course and revive carbon pricing due to its many benefits, especially its efficiency.
Carbon Fee & Dividend remains the most effective and efficient means to bring down emissions. In fact, it is essential for the heavy lifting still needed to decarbonise the economy.
- It provides a solid foundation on which hundreds of emissions reduction initiatives can be built. It makes all these individual solutions happen much more easily. Its price signal enables business, industry and finance to do most of the work and saves government from the complex task of designing, legislating, regulating and funding individual initiatives that on their own are too small to be effective.
A steadily-rising carbon price will make all of these individual solutions happen so much more easily!
Let’s not do it the hard way!! Sara Kenny – Durack electorate, WA
- It also phases out the subsidies that flow to fossil fuels by not having the health and economic costs to society included in their price. This is vital as these wasteful subsidies work directly against the emissions reduction programs funded by government, community and business, rendering them wasteful as well.
Emissions-reduction policies and fossil-fuel subsidies: pulling in opposite directions
- Carbon Fee and Dividend will greatly assist our post-COVID economic recovery as, unlike other forms of carbon pricing, it will boost the economy. A traditional carbon tax would be likely to slow down the recovery. However, a Carbon Fee with Dividend will speed it up by putting more cash in low income pockets than is taken out through the fee. This money will be spent on goods and services, which will in turn create employment. At the same time, employment will be created, as industries move to lower emissions production and distribution methods and invest in R&D to reduce their emissions, as well as in renewable energygeneration and distribution.
- Finally, an efficient carbon price will provide a glide path to guide fossil fuel and related industries towards zero carbon energy and future prosperity. This
is important for fossil-fuel workers at all levels, as well as their owners and investors. Current policy settings encourage the industry to maintain business as usual and risk a major crash that would leave many expensive assets stranded, many people unemployed and serious shocks to the economy, significantly greater than those induced by COVID-19.
Preparing for the endgame
For the next two months, CCL will be planning the strategies, structures and resources needed to enable us to reach this goal. The next 3 or 4 years are critical for climate policy in Australia. It is vital that Carbon Fee & Dividend is firmly on the table and has every chance of being selected to guide our transition. The world is moving towards carbon pricing and Australia will have to follow. Let’s persist and give it the best price possible.