<a href="http://www.gmagazine.com.au/blogs/leon#">The Business of Green</a>

The Business of Green

Money matters in the green world, by Leon Gettler.

Challenges of the new energy era

Energy era

Credit: iStockphoto

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Unless you have been under a rock, the big news for the environment and the economy is that the Senate has passed the legislation bringing in a carbon pricing regime for Australia, clearing the path for the scheme to become law by July 2012. This is as seminal a moment in Australia as the floating of the dollar and the GST, it’s a nation changing event. But there are doubts whether it will be enough.

So what does it mean? The climate change package will see:
• A carbon emissions tax on the country’s 500 biggest polluters from July 2012;
• The tax moving to an emissions trading scheme in 2015;
• The tax beginning at a fixed price of $23 a tonne and rising by 2.5 per cent a year to 2015;
• The tax not applying to agricultural emissions and light on road vehicles;
• Weekly cost rises of $9.90 for the average household;
• Average households getting assistance of $10.10 a week;
• Free carbon permits for Australia’s highest emitting industries.

And still the debate continues. The Australian Industry Group and the Business Council of Australia say the price of $23 is too high and Nationals leader Warren Truss has declared the tax to be "Labor's
betrayal of the Australian people".

"The Australian people willing, the Coalition will not allow the carbon tax to dog future generations," he said. "We have given ironclad notice to all Australians that should the Coalition form the next government we will repeal this destructive tax."

He is of course repeating the lines of Tony Abbott who had vowed to commit every drop of blood in his body to fight the carbon tax, and then flew out of the country to London and wasn’t even there for the vote, leaving it to the Nationals to fight it.

The problem for the Coalition is that they can’t unwind it if they win office. They are unlikely to have a majority in both houses of Parliament which mean they will have to live with it. Sooner or later, political expediency will take over. The Government might not win the next election, and based on the opinion polls it looks unlikely that they will, but this is a big win for Julia Gillard. She has achieved something that defeated John Howard, Malcolm Turnbull, and Kevin Rudd. What makes it even more extraordinary is that she did it from minority government, with a lot of help from the Greens.

Indeed, if it was a victory for the Government, it was as Bernard Keane writes in Crikey, an even bigger one for the Greens. “Even Julia Gillard, who’ll go down in history as the woman who managed to achieve what any number of male leaders couldn’t, didn’t particularly want it. Instead, it was the Greens who dragged Labor back to do what it had promised and then resiled from. It’s their day, having seized on the opportunity afforded by a minority government, adeptly exploiting the hung parliament delivered by Labor’s ineptitude. Much of the post-election commentary on the Greens focused on whether the responsibilities of the balance of power would destroy them as it destroyed the Democrats. By becoming part of the process from the start, rather than only being played in at the death, the Greens managed to shape the package to a form likely to appeal to their base, which was always suspicious of “market mechanisms” anyway. The Greens have thus passed their first major balance of power test with flying colours.”

Still, it’s not perfect and there will be issues. Like the fact that high-emitting industries, like steel, aluminium, zinc, pulp and paper makers, will get 94.5 per cent of their carbon permits for free and a $300 million gift for the steel industry on top of that.

And at the same time, the Prime Minister has declared that coal fired power stations will be operating in Australia for the next 40 years.

That’s why the International Energy Agency is warning that climate change could be irreversible because we will be building so many fossil-fuelled power stations, energy-guzzling factories and inefficient buildings in the next five years. In other words, we have just five years to make radical changes or lock in climate change.

More radical solutions and hard decisions are needed to save the planet. These will be the big issues at the Durban summit at the end of November which follows the failure of talks in Copenhagen in 2009 and Cancun in 2010 to agree a successor to the Kyoto Protocol. And unless we get pledges from all the polluters to reduce emissions, there will be no global climate deal. Which will mean Australia will be going alone.