Home' Trinidad and Tobago Guardian : July 24th 2014 Contents JULY 2014 • WEEK FOUR www.guardian.co.tt BUSINESS GUARDIAN
THE ECONOMIST | BG25
Working out a way to
deal with climate
change by cutting
carbon emissions has
long tied Australia in
The country relies so much on coal and
other fossil fuels for its energy that it is one
of the world s highest emitters per head of
population. Bitter battles over carbon pricing
have cost two prime ministers and an oppo-
sition leader their jobs.
When he led the conservative Liberal-
National coalition to power 10 months ago,
now-Prime Minister Tony Abbott made it his
chief electoral promise to "ax the tax." On July
17 Abbott claimed victory when parliament
approved legislation to abolish the previous
Labor government s tax on carbon emitters.
Abbott rose to the top of the Liberal Party
as a skeptic about climate change. It was how
he toppled Malcolm Turnbull as the party s
leader in late 2009, after Turnbull had struck
a bipartisan deal with the Labor leader of the
time, Prime Minister Kevin Rudd, over a cap-
and-trade scheme for carbon emitters. Rudd s
party, in turn, ditched him as leader when he
walked away from that plan. Julia Gillard,
Rudd s successor as prime minister, introduced
the carbon tax in 2012.
More than conviction, it was populism that
drove Abbott s campaign to abolish the tax.
As voters support for action on climate change
wavered, he branded the tax a "wrecking ball
across the economy," raising the cost of busi-
ness and destroying jobs. He forecast that
industrial cities such as Whyalla in South Aus-
tralia would be "wiped off the map."
These predictions have not come to pass.
Indeed, there were signs that the tax was start-
ing to work, by encouraging Australians to
switch to cleaner forms of energy. The Climate
Institute, a research group committed to green
policies, says that the proportion of Australia s
electricity sourced from brown and black coal
has fallen by 10 per cent in the two years since
the tax started, while that from renewable
sources, such as wind and solar, has risen by
more than a third, albeit from a very low base.
The carbon tax brought the federal govern-
ment revenue of more than US$6.5 billion last
fiscal year. In its place Abbott proposes a
"direct action" plan. Details are sketchy, but
its main feature is a public fund, worth about
US$2.3 billion in the course of four years, to
pay big polluters to cut emissions.
The plan is a nod to greens, and suits busi-
ness by shifting the cost to taxpayers, but it
sits oddly with the Liberal Party s free-market
instincts. There also are doubts about whether
it will achieve Australia s bipartisan commit-
ment to cut carbon emissions by 5.0 per cent
from 2000 levels by 2020. Meanwhile Abbott
is resisting a bid by President Barack Obama
to include climate change on the agenda of
the G20 leaders next summit, set for Novem-
ber in Brisbane.
Fulfilling his pledge to ax the tax has not
gone entirely Abbott s way.
An alliance in the Senate between Labour
and the Australian Greens at first blocked the
bill after the lower house had approved it. A
new upper house, reflecting the result of last
year s election, took over on July 1. Enter Clive
Palmer, a legislator and a Queensland mining
billionaire. Though he sits in the lower house,
three new members of his Palmer United Party
gave Abbott, on his third try, the votes needed
to get the abolition through the Senate.
Some of Palmer s tactics are calculated to
grab political attention. At a recent press con-
ference in Canberra, where he stood alongside
former Vice President Al Gore of the United
States, now a climate-change campaigner,
Palmer laid out his conditions for supporting
Abbott. He insisted that two public bodies
Abbott had wanted to eliminate be saved: the
Climate Change Authority, which advises the
government, and the Clean Energy Finance
Corporation, which offers loans for energy-
Palmer also wants an emissions-trading
scheme to replace the tax, but one with the
price pegged at zero until Australia s main
trading partners adopt similar schemes, as
some already have.
No one is sure how or whether this will
happen. Now even Abbott s modest direct-
action plan faces its own hurdles in the Sen-
ate.@2014 The Economist Newspaper Ltd.
Distributed by the New York Times Syn-
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