Australia’s Emission Trading System – from “Carbon Tax” to market force …

I am a supporter of putting a price on carbon. 

In fact, I am a supporter of pricing all pollution.

The premise that climate change is occuring is not in doubt. The evidence can be seen across the globe. The Amazon rainforest is in the middle of a drought, wine growers are looking to relocate because of temperature increases, traditional dry sheep countries have migrated to dairy farming due to the rain … the climate is changing, anyone who cares to look can see it.

The argument of whether it is a natural occurance or one that is completely caused by human activity is not really important. What is important is that it is occuring, and that we do and can make an impact. So, let us take some responsibility for that fact.

The so called “carbon tax” is a step in the right direction. It is a solution that is supported by economists, environmental scientisits and basically everyone who has looked at this issue for more than thirty seconds. 

I like what Paul Harris wrote in the Biogas Group, so I’ll just re-blog it here.

I have said a number of times that “Money squeaks louder than truth!” as the 
big companies are pouring $10 million into advertising against the price – 
money they have taken off us and could be spending on reducing pollution (I 
know it’s chicken feed to them but it sounds a lot to me!). 

Even if the “Carbon Price” does not solve “climate change” I still think the 
proposal is really important as it will help us move from “dirty” fossil 
fuels and even nuclear energy to renewable energy while we have options and 
energy to assist, rather than delaying real action on renewable energy until 
there is no choice (which will be a huge disaster for nearly everyone!). 

You may like to watch the 2 minute video at [link replaced with attached video below] 
which provides an explanation. I really like the “Day in the life of Tony 
Abbot” at [link replaced with attached video below] as well. 




A common enough response to all of this is something along the conversation of the like of which follows along with my responses:

So, to make up for the added expenses, companies pass along the expenses to consumers. This doesn’t hurt consumers who have good, solid incomes. It’s just a little bump in costs, no biggie. But it is CATASTROPHIC for people living on low incomes, like the disabled and elderly pensioners and the working poor. But hey, if we get rid of all the poor people when they can’t afford electricity, or gas or oil to heat their house, we’ll be using WAY less carbon!

To which i reply that the Australian ETS actually takes that factor into account – they are pumping 50% of the revenue raised by the “carbon tax” back into pockets of those said same low income members of the population with those earning below $30,000p.a. receiving the biggest tax and rebate advantages and those above $85,000 only receiving a tax deduction that equates to $3/week. 

The idea is to force manufacturers to consider reducing their impact. Yes, they will pass those costs on – and in the first few years while the rate is fixed, consumers will see that occur gradually. Once the ETS kicks in and goes to the “open free market” those rates will be dictated by the market and those products that do pollute will need to purchase a Certificate from an ever decreasing pool of certificates. This will make the flow on costs far more expensive … but, once more, the “free market” will compensate for this as those products that are “greener and cleaner” will become cheaper and more affordable – increasing the competition and theoretically lowering prices overall.

There is no perfect solution. However, I do think Australia has learnt from the ETS schemes implemented across the world and has implemented a system that does try and address a range of issues.

Further, this is extremely important to Australia from a trade point of view. The UK and Europe are already dictating ISO 14001 EMS compliance, declaration of Carbon footprint and Life Cycle Assessment of the chemical and genetic makeup of the products that are being imported. If Australia wishes to continue to trade with the European Union, we need to be able to meet those factors. The ETS is one step in keeping our place on the world trading table.

Finally, I think that Australia, as a first world country, has the obligation to try and repair the damage it has caused on the world stage and more importantly, to be a leader in the Asia-Pacific region. How can we expect China, India or any other developing economy to make an effort in this arena if we are not willing to do so ourselves?

I’m not going to get into an extended debate about this here… it just is not worth it, because we’d start getting into a discussion of whether there is actually anything we can DO about climate change, and that’s going to lead to the kind of butthurt that only happens when discussing religion – or treating science like religion.

And i may reply that au contraire! A healthy debate is always worth having 🙂 

I don’t believe that the issue is a religious argument, in fact, I’ll go one step further and state that I do not care what anyone “believes” and state only the facts — that is that

  1. The climate is changing and
  2. Humans impact the earth they are on.

Now, whether the two are in any way related, I don’t care. I believe we should be responsible for the consequences of our actions. I think we should clean up our mess and I believe that corporations and individuals alike should be held financially responsible for the impact they make.

Whether climate change is the Asthma or the Emphysema is another argument. Honestly, both are bad, both reduce the lungs capacity and reduce the range of activities one can enjoy in the future.

That said, regardless of which is the cause and nature of the reduced lung capacity, smoking is not an activity that is going to help the situation. Sure, not smoking will not “reverse” or “fix” it … but it will stop it from getting worse.

For that, I am a supporter of the premise of making a difference, even if it is one that doesn’t show up as a golden milestone.

However, it is naive to think that either energy companies OR governments are going to stick to the spirit of such “carbon taxes”. Companies are going to anything they can to avoid impacting their profit margin, which for many will mean price increases, not investment in “greener” energy.

Oh, I agree – a full 100 glorious percent! As a socialistic type person, I do not believe that the so called “free market” will ever do anything that is egalitarian or in any way in the interest of the society it operates within. That is why these sort of initiatives are required. It may not be perfect – especially in light of those same said corporate entities constantly influencing and lobbying the government representatives who are meant to reflect the desires of the people.

Additionally, you’ve now created another level of bureaucracy to administer these rebates, creating another expense which in no way goes toward researching better solutions for producing greener energy. Waste, waste, waste. Wasn’t the point to STOP waste?

Now you’re playing with semantics. That said, no system is perfect, because no system is perfect, no solution created and managed by the system can ever be perfect either. This is the cost of the system. Yes, there is waste, but surely, the statement is not “if there is waste, let’s not do this!” but rather “even with the introduction of this waste, this faulty solution is far better than doing naught”, don’t you thin?

Heavy-handed enforcement leads to companies leaving the country, costing jobs. There’s ALWAYS a negative.

Actually, the fact that some initiatives are not heavy handed enough is why this occurs. Corporate entities leave the country to reduce costs, no other reason. They go to countries where the laws and societal standards have not reached those of the country they have left – allowing them to hire to utilise child labour, force employees to work three shifts for mere pennies a day, pump toxins into the local water supply and wipe out forests to build their factories. All of this for the ability to provide shareholders with a few extra cents.

I feel that the emphasis on carbon in recent years is completely out of balance with the impact it may have. With the amount of toxins and heavy metals being dumped (legally and illegally) into our environment, it isn’t much going to matter what the temperature is or how much rain is falling if everything has been contaminated with poisons.

Once more, I am in agreement. However, the fight to tax “general” pollution is even harder than the fight to stop greenhouse gases. Small steps — the ETS may very well open the door for those issues to be handled as part of a larger, more encompassing scheme. 

And because there are no real solutions, and the world is a mess. All I can do is the best I can as an individual to reduce waste, and I think that is the first solution everyone should be working on.

Which goes back to my original point — that all entities should be doing so. If they will not, then we need to provide them with an incentive. Carrots are traditional first-point motivators.

Fines are just the stick version of the incentive stick that is government enforced rules though, is it not? Don’t get me wrong, When it comes to corporations i am both a cynic and a pessimist, thus I am a gigantic fan of profit-crippling revenue percentile based penalties … but the optimist in me hopes that carrots, as small and malformed as they are, will be enough to create an incentive.


The issue is long and complicated, i agree … but the important thing is to make some form of effort rather than to attack each initiative as not being inclusive enough, or exclusive enough or whatever else we can find wrong with it. We need to do something before it’s too late to do anything. 


Doing nothing is not the answer. I’d rather we do a half assed job than nothing at all.


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