After reading a few similar posts I thought I’d jump on the bandwagon and try something in the open-letter style, in the vain hope that it might make its way to its intended recipients via the magic of the interwebs. Since I don’t have time to provide statistical analysis what follows is very much a matter of opinion. You can either take my conclusions on trust, or do your own research.
Dear Senators Lambie, Lazarus, and Wang,
Congratulations to you all on your appointments.
I write to express my concern about the repeal of the Clean Energy Act which is currently before the Senate. I cannot emphasize enough the significance of this legislation, and the importance of the task before you. As an Australian who plans on living at least until 70, I feel I have a vested interest in this debate, and so I would like to be sure that you are fully apprised of the facts and consequences before you vote to repeal carbon pricing.
Abolishing the carbon tax will not save families $550 a year. In the last 10 years we have seen energy prices double, but only about 3-4% of this increase is due to the carbon tax. The rest is due to over-investment in poles and wires subsidised by taxpayers and paid for by consumers. Demand for electricity has actually fallen by about 13% over the last 5 years. This may be in part due to an increase in rooftop solar PV, in part due to rising prices. My point is that carbon pricing has not been the driving force behind high energy prices. Overall the impact of carbon pricing has contributed an estimated 0.7% increase to cost of living. Compared to a 2.5% hike for the GST, this is negligible.
No doubt you have become accustomed to our Prime Minister’s underhanded tactics, allowing interest groups to dictate policy and appointing climate sceptics to key advisory positions. As much as Abbott would deny it, the time for arguing the point is over. The science has been around since the 1970s. If CO2 levels rise to 450 particles per million then the planet can be expected to warm by two degrees, posing significant risk to life on earth. CO2 levels are already at 400 ppm and the frequency and severity of extreme weather events such as typhoons, floods, droughts and bush fires has increased more rapidly in the last five years than at any time in recorded history. Only those with their heads in the sand have not seen this coming.
It would be foolish to think that our shared desire for the survival of the species would somehow be enough to shake the global economy from its dependence on fossil fuels. On the other hand, a sudden rise in input cost might do just the trick. With crude oil now soaring above $100 a barrel and the Middle East in the grip of war, it looks like we may be seeing the end of an era. As long as demand for energy remains high and shale gas cheap the US may ride out the prospect of a double dip recession for a decade or so, but new sources of energy are desperately needed to drive a new economy. You need only look toward Beijing and Washington to see the reality of this. The fossil fuel industry’s days are numbered, and in what has already been dubbed the Third Industrial Revolution, most significant new investment is in renewables.
What does this mean for Australia? We can only continue to burn coal for as long as it is cost effective to produce it. Once global accords on climate change are reached, coal will face resistance in the market and we will start to see diminishing returns. The future is already looking bleak for the industry, and any amount of foresight would have us steer clear of stranded assets, not to mention the opportunity cost of not investing in renewables sooner.
In spite of Abbott’s best attempts to thwart it, Australia already has a mechanism in place to reduce emissions and provide significant investment capital for renewables. With attendant compensations to taxpayers such as raising the tax free threshold, family tax benefits and other measures, many poorer Australians, including pensioners, are actually better off under the current scheme. In spite of what Abbott would have us believe, the Clean Energy Act is not a toxic tax. Rather it is a well crafted package of reforms which has already lowered emissions by 7% and provides a means to steer our economy out of the cul-de-sac of the resource boom and onto the autobahn of technology and innovation. Who can tell how many new jobs will be created along the way?
With all respect to environmentalists, the legislation currently in place was not designed by a bunch of climate scientists who all got together and decided that preserving things like clean air and water for future generations was a really cool idea, but by shrewd economists who foresaw the need to future proof our economy against global trends. Dismantling this legislation without thinking through the consequences would amount to an act of economic vandalism, or deliberate sabotage, take your pick.
While preserving the planet for future generations is undoubtedly a noble cause, there is a far more cynical truth to consider. Our economic future very much depends on making the transition to clean energy as quickly and smoothly as possible. So while I admire the spirit of the amendments proposed by the Palmer United Party, I would suggest that in the best interest of all Australians the Clean Energy Act should be preserved in its current form. I urge you all to consider this carefully before casting your votes.