It seems like the Australian media does not understand the carbon tax. As portrayed, it seems to be entirely a penalty for being a high energy consumer and the only silver lining is cashback compensations and the promise that no jobs will be lost in the process. Both are self-defeating. Giving cashback compensations will be a drain on the economy and reduce any positive effects of the tax. By the same token, the aim of the carbon tax is precisely to put pressure on unsustainable industries. So, of course, jobs will be lost in the process. That’s the whole point.
The positive effects of the carbon tax have been completely eclipsed by these concerns and it looks like the carbon tax will be the biggest issue come the next election. It should be, but not the way it is currently presented.
The aim of a carbon tax is not so much to punish Australia as a country as it is to provide a much needed boost for a more sustainable future. In an ideal economy, free market forces will prevail and consumption, resource management and costs will somehow find the best balance. However, this ideal economy does not exist. A lot of costs are hidden. Government policies, for example, can foster business and bias the market. Government funded research means that the cost of discovery is defrayed. Tax exemptions for certain fledgling businesses mean that these businesses have a competitive advantage over others. Good infrastructure and services help businesses along and lower their costs. Over the years, developed countries have evolved policies, tax structures, regulations and infrastructure that promote business without acknowledging environmental costs. This biased the economy towards unsustainable practices.
A huge obstacle to accounting for the environment is identifying just what is the value of the environment. Some environmentalists like to argue that this value is infinite. That it must be preserved at all costs. Yes, this is true. But it is not helpful. It is like saying that life has infinite value. Yes, but someone still has to pay the medical bill. Saying that something has infinite value is fine as long as you don’t have to pay for it. But suppose the government were to say that since life has infinite value, all the money we earn will have to go to the medical industry? We cannot own a home or a car since that money can be used to save some life somewhere. Clearly, it is not a tenable policy.
In the same way, the environment needs to be costed. But how do you do this? It is somewhat complicated but it can be done. The first step is to determine how we can fit into the earth’s ecology. What are the things we need to do to reduce our ecological impact and footprint. It deserves a longer discussion at another time.
What we need to focus on are some simple facts. Firstly, the future must be, almost by definition, sustainable. The only question is how do we do this? Secondly, since sustainability is the future, how can we give ourselves a competitive edge? The carbon tax is actually one such initiative. Thirdly, sustainable industries are, again almost by definition, more efficient, less polluting, less wasteful and therefore more profitable. Under current conditions, it also means not only more human intensive industries in many instances but also smaller and more independent ones. It suggests that if we do this properly, we will have more jobs and better profits. It also seems that under current conditions, a sustainable economy will be less dependent on huge mega-conglomerates and smaller industries can be very successful with the Internet. This means less exposure to foreign buyouts. The icing is that we will also have a more liveable environment and more nature reserves to enjoy.
image: news.com.au
The sustainable future is a better future all around. The problem is in the transition. What the government needs to do is to roll out a new economic plan that will result in more jobs, a stronger economy, a better life for all and lower taxes. Impossible? Ridiculous? On the contrary, this is exactly what the green revolution is all about. A design proposal I made for an Eco-City in China was budgeted at 80% its original cost and valued at 110% its marketing price. What didn’t happen here is that the government didn’t put such a package together. Instead, an uneasy compromise is reached. What needs to happen is for green industry proponents to meet with the government and come to such a deal. The exchange is this: green policies from the government, and a viable economic package from the greenies. What the government needs to roll out is not just the carbon tax but also the sustainable future it is part of.
Dr. Ong Boon Lay The University of Melbourne
