Friday, July 18, 2008


EDITORIAL THURSDAY 17.07.08. The response to the government’s green paper on the proposed emissions trading scheme has been mixed. On the one hand, business and consumer groups have welcomed the support and compensation measures which will help to reduce the financial impact in some sectors. On the other hand, environmentalists and economists fear that these very measures make the scheme too soft and run the risk of failing to achieve significant reductions in emissions.

The support for so called “trade-exposed” industries, that is those which are exporting into the global market, means that some of the biggest polluters will get free permits, while power generators will receive only limited support resulting in the price of electricity rising by around 16%. The result is that Australian consumers will be forced to pick up the tab, which is why there is also the promise to provide assistance to low and middle income earners.

The problem is that there is a paradox inherent in these proposals. If the idea of putting a price on emissions is to discourage people from emitting, the process of providing free permits for industry and financial assistance for individuals would seem to neutralize the incentive to reduce energy consumption.

Of course the reality is that many people already use as little electricity as they can and burn as little petrol as they can because of limited incomes. Increasing the price won’t necessarily mean that they will use less; it just means they will have to make sacrifices in other areas so that they can continue putting petrol in the car so that they can go to work.

Environment Minister Penny Wong has promised to reduce the excise on petrol to neutralize the cost impact of emissions trading for the next five years. Beyond that she has suggested that Australians should think about the type of cars they drive. I suggest that many of us would choose to drive environmentally suitable cars now if only they were available at a cost efficient price. We can’t buy what doesn’t exist.

The fundamental problem is that our entire society is built around the idea of affluence and consumption. If we are not enjoying those things then we are aspiring to them. The truth is that real change is going to require changes to the way we live and the way we want to live. In order for those changes to occur from the bottom up, other changes will be necessary from the top down.

The structure of our society needs to be re-engineered in such a way as to provide ordinary everyday people the framework within which to live sustainable lives. Pricing carbon dioxide emissions is only part of the process. The real challenge is to invest the billions of dollars generated by this scheme into the development of genuinely renewable energy sources, such as wind and solar, and build the viable alternatives so that we can all embrace them and get on with our lives.

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