Carbon tax is a phony proposal

The Gillard government has finally unveiled its carbon tax plan — but does it deliver on its supposed goal of tackling climate change? John Perkins, Senior Economist at the National Institute of Economic and Industry Research, takes a hard look at Labor’s strategy, and finds it wanting.

The government’s carbon tax proposals are a step forward, but as such will do little to reduce our emissions. A tax of $23 will only cause a small shift from coal to gas-fired electricity generation. For so-called emissions reductions, the proposals rely on us buying possibly phony credits from other countries that undertake to preserve their rainforests.

We would achieve more by scrapping the plans for a trading scheme and just having a carbon tax. This needs to ramp up to much higher levels in order to justify major investment in alternative energy.

Meanwhile, we continue to overlook the elephant in the room, which is our coal exports. In its full page advertisements, the Coal Association is attempting to erect a smokescreen. The 250 million tonnes of coal that we export will produce 750 million tonnes of carbon dioxide when burnt, which is far more than all our other emissions, and is not subject to any tax.

If we were to join together with Indonesia and South Africa to impose an export tax, which would then apply to the bulk of the world’s coal exports, this would be a more effective way of reducing global emissions, while protecting our coal industry at the same time.

Jul 12, 2011

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