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Wednesday 23 Aug 2017 | 02:39 | SYDNEY
Wednesday 23 Aug 2017 | 02:39 | SYDNEY

Greg Hunt's alternative climate policy

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COMMENTS

11 July 2011 14:56

Greg Hunt, Shadow Minister for Climate Action, has just left the Lowy Institute after presenting an alternative climate change policy. It was more than a 'this tax is bad' speech; you can read it here, and there will be an accompanying 5000-word paper on our website tomorrow.

The Shadow Minister began by defining the parameters of the current climate change debate. He said it wasn't about the existence of global warming — there was broad agreement about that across the parties. It also wasn't about targets. Instead the debate is about the mechanism that should be used.

Looking internationally, he argued other global mechanisms to reduce emissions were largely ineffective or illusory. Emissions in China were rising dramatically. In the US, there was no hope of a national carbon tax and state-based mechanisms were falling apart, while in the EU the tax was minuscule in comparison to the one proposed for Australia and was having little impact. There was no serious effort in India and Canada, Japan and Korea were unlikely to act without others doing so first. 

At home, he pointed to at least two major problems with the Government's proposed approach. First, it was essentially a tax on electricity, and this would have little impact on demand (as this was largely fixed) or supply (as the price would be passed on to consumers).

Second, he argued the tax would result in two forms of leakage: it would force some companies to move the polluting parts of their operations offshore where they could cause greater pollution than if they were carried out in Australia, and there would be $3.7 billion per annum in transfer payments to other countries to help reduce their emissions.

His alternative solution was directed at two levels. Internationally, he proposed pursuing an international agreement among major emitters via the G20 with a focus on sectoral approaches. Domestically, he proposed a market-based direct action approach, similar to the water buy-back scheme, where the Government buys back water rights from users selling them for the lowest price. He argued the same reductions in emissions could be achieved at a fraction of the cost and would be entirely funded through savings.

Photo by Flickr user rpeschetz.

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