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Issue #1492      9 March 2011

Phoney carbon debate unfolds

Prime Minister Julia Gillard is taking plenty of flak at the moment for reneging on her pre-election promise not to introduce a carbon tax. That will probably blow over. The energy-guzzling trans-nationals are already making projections around a yet-to-be-fixed “price on carbon”. The curious, confusing and dishonest “debate” that is unfolding is about who will ultimately pick up the tab for Australia’s profligate energy use and the monopolies are making it clear – it’s not going to be them. While ordinary households are tightening the energy belt and looking to alternatives, monopolies in high-consumption sectors of the economy are angling for the equivalent of a licence to go on polluting.

The current tax proposal has a sordid history. The mining sector scuttled the Rudd government’s Carbon Pollution Reduction Scheme (CPRS) and went on to sink the original Resource Super Profit Tax (RSPT). Neither of these threatened to trim corporate profits by very much if at all.

They were full of exemptions, compensation, loopholes and work-arounds for the mining corporations. This didn’t stop the same mining companies waging plainly dishonest scare campaigns about plunging profits and massive job losses. Recent profit announcements by BHP Billiton, Rio Tinto and others show what a lot of hot air it all was. An Australian Bureau of Agricultural and Resource Economics and Sciences quarterly report forecasts commodity export earnings would grow 33 percent to $186 billion in 2010-11!

Rudd’s real climate change colours became obvious at Copenhagen in late 2009 when he helped the US derail efforts to get a post-Kyoto agreement with binding emission targets. He was a true friend of the resource corporations but his non-consultative style and plummeting popularity brought on an inner-party coup and, eventually, a new Labor government even more committed to seeking direction from the transnationals.

CPRS take two

The Gillard government duly delivered an even more toothless Resource Super Profits Tax agreeable to the big mining companies. It remains to be seen if it will deliver an even more toothless Carbon Pollution Reduction Scheme. Early indications are that it certainly wants to. Few things are clear at the moment about what will be covered under the scheme. It is not known if petrol will be in or out, for example. Agriculture will be exempt.

As the multi-party climate change committee comprised of Labor, Green and independent MPs begins its deliberations, the only other thing taken as given by its members is the neo-liberal belief that markets deliver the best outcomes in this policy area as well. The Australian Financial Review (AFR) summed up the credo in a recent editorial: “Market-based measures have a good record of achieving low-cost pollution reductions”. News from the EU about its cap and trade scheme and the suspension of schemes in the US, Canada and Japan shows this to be a very doubtful claim.

Climate Change Minister Greg Combet has been quoted in the media saying that legislation should be ready in September this year for the introduction of the mechanism in July 2012. At this stage the scheme is expected to be a straight levy per tonne of carbon emissions. “Trade exposed industries” will be compensated so that jobs (read profits) don’t take a hit upon the introduction of a revised CPRS. The loudest sectional interests passing comment at the moment are the coal and steel industries.

Bluescope Steel is arguing there should be no penalty on the steel industry for its emissions because it will be forced to compete with countries that haven’t put a price on carbon. When Rudd sought to introduce a CPRS with a starting price of $10 a tonne for carbon, the government offered to pay for 95 percent of its permits to pollute. This was rejected as insufficient. Nothing has changed. Bluescope’s chief executive Paul O’Malley has suggested the tax should go onto the electricity sector only. The threat has been made again to close the Port Kembla steel works.

Big coal, represented by the Australian Coal Association, wants more than the $1.5 billion offered by Rudd when his CPRS was being sold to the transnationals. Association chief executive Ralph Hillman is considering “sending a message” to the government that it does not want member corporations to pay for the damage they are causing to the environment. An ad campaign might be launched. “We hope we don’t have to, even though we were successful on the CPRS and the MRRT [minerals resource rent tax] it is not our core business but we are very apprehensive that we will end up with a lousy outcome,” Mr Hillman told the AFR.

At this stage in the “debate”, the Liberals are banking that the public will be so concerned by the misleading claims about jobs and prices that it will back its irresponsible do nothing approach.

The real agenda

The resource sector is not really stressing about the overall policy direction being set by the multi-party climate change committee. It knows that a public concerned by extreme climate events, dwindling resources and food insecurity will demand action. The government must be seen to be doing something. The job for the transnationals will be to get other people – working people and small players – to pay their way. It is early days but it already appears that an extremely modest price of $20 per tonne will be put on carbon and that it will do little to cause the necessary reduction in emissions.

Governments like those in Australia are not serious about tackling the big polluters. They aren’t serious about helping working people escape their clutches. In Australia they will join the private sector to build huge energy-gorging desalination plants selling expensive water but offer only niggardly and strictly qualified rebates for rainwater tanks for householders.

The federal government is so concerned about climate change and the encouragement of renewables that it set to reduce the rebate on solar panels through its Renewable Energy Certificates Scheme from July this year. Homeowners with the necessary cash are scrambling at the moment to install systems before the federal government scales back its commitment to the environment.

The Communist Party of Australia does not believe a market mechanism will achieve the necessary reductions in carbon emissions. Market mania got the planet into the climate emergency in the first place. Planning and targeted legislation that will compel profit hungry mega-polluters to clean up their act are the way forward.

Ultimately, more fundamental social change is required. As the Political Resolution from the CPA’s 2009 Congress puts it:

“A planned economy which has eliminated the private profit motive has the maximum potential for solving environmental problems...

“Socialist production is not a slave to capitalist market economics and its vicious, frenetic cycle of competition, advertising, consumerism and waste. It aims at satisfying needs, not over-producing commodities, many of which have little relevance to real needs and lead to gross over-use of energy”.  

Next article – Preferences vital in NSW elections

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