18 November 2010 – The Federal Government’s recently released ‘Prime Minister’s Task Group on Energy Efficiency’ report has more holes in it than a rabbit-infested paddock. JOHN POWER invites more analytical debate and less ‘greenwash’.
Press releases from the Federal Government fly thick and fast through the ethers these days. One of the latest missives proudly announces the release of another governmental report designed to stimulate community-wide energy efficiency. It notes that “by far the most important element in a vision of a step change in Australia’s energy efficiency improvement is the presence of an explicit price on carbon”.
Whether this ‘carbon price’ manifests itself as an emissions trading scheme or a carbon tax is moot, though the odds seem to favour a tax.
On the face of it there are obvious questions about the introduction of such a scheme, most obviously relating to how carbon production is defined and measured, how its production and use is audited and policed, the ability of a coherent bureaucracy to oversee such a program, and the ability of the community (the ultimate payers of such a tax scheme) to pay higher prices for goods and services that involve carbon production during fabrication or distribution. None of these points should be dismissed as trivial.
Consider, by way of example, a product as pervasive and innocuous as concrete. Would a company be deemed to be creating carbon emissions if it were to construct a new concrete-based building (concrete, after all, requires massive quantities of energy to make, inevitably releasing significant quantities of carbon). Or would the burden of a carbon tax as it related to concrete be paid by the concrete manufacturer/supplier? Or would tax costs be shared between both parties? According to what kind of contract? And if both the concrete supplier and building owner were taxed, would that be ‘double-dipping’? Of course, a building owner, one imagines, could claim substantial exemption by using recycled materials – though the mathematical breakdown of taxed and untaxed components would be a challenge for any auditor. Further long-term questions arise regarding the possibility of compensation payments to building owners at the end of the building lifecycle. Upon demolition, would an owner who committed to give or sell demolition materials to a recycling program be able to offset some or all of the previously paid taxes? How much? And what if the building changed hands over its lifetime or underwent periodic extensions? Quick, where are the carbon tax lawyers when you need them!
JUST GO OFFSHORE
Businesses tend to be adept at evading local problems by shifting them offshore. Would a carbon tax simply encourage businesses to relocate the ‘dirty’ manufacturing or energy-hungry parts of their enterprises overseas, restricting their local operations to less carbon-intensive assembly work and administration? Think of the global consequences if the chosen offshore facility were to produce vastly more carbon emissions than a local operation might have created! A truly effective carbon tax, therefore, would have to take account of the FULL international production lifecycles of products and services released in Australia, but could an international auditing process be implemented? No, it couldn’t.
PRICE CAN’T FIX EVERYTHING
The ultimate problem with a carbon tax is the assumption that higher prices are the only effective tool to encourage good behaviour. This is patently wrong. The Government doesn’t encourage good eating habits by placing a $10 tax on fatty burgers; instead it prefers to tout the merits of good foods and leave pricing alone. There are plenty of corollary steps that a regulatory authority might take to minimise carbon emissions. For example, shut down the source of the problem – coal-fired power stations – and introduce alternative energy systems over time in a staggered fashion. Don’t tax bad practices, stop them! Or permit businesses to use only a capped amount of publicly sourced grid electricity, above which they would have to rely on their OWN alternative clean energy sources (wind, geothermal, wave, solar, etc). Such systems, of course, would also lead to selected higher prices for consumers, but in a far more transparent fashion based on the real-life costs of the alternative energy production.
Finally, any measure of energy efficiency based on carbon emissions alone is too arbitrary for serious consideration. As at least one highly perceptive researcher has pointed out, large bushfires, for example, can produce enough CO2 to counteract any savings that might be achieved through a carbon tax. Perhaps the most effective way for Australia to reduce carbon emissions would be to shoot an arsonist rather than create a carbon tax. How can a carbon tax be treated seriously when we all know that society-wide carbon emissions are far more complex in their genesis and difficult to measure than might be defined in a simplistic, selective government report?
Nobody denies the value of greater energy efficiency in the built environment; indeed, progressive designers, facility managers and architects are achieving noteworthy and noble results that will influence positive building management processes over the long term. But a carbon tax is an ill-defined, clumsy and ultimately gratuitous mechanism to encourage others to follow suit. The only winners from a carbon tax would be lawyers, bureaucrats and those involved in auditing businesses.
The latest government report, for the record, is available by clicking here.
Do you agree or disagree? Write your Comment below.
I LOVE IT JP
you should send this to a few media – ABC radio would pick it up – age etc.
fabulous article.
jjx