Given that Kevin Rudd faces a tight electoral battle I suppose introducing an ETS a year early seemed like a good idea to him. The opinion polls are ambiguous – most Australians favour the tax – hardly surprising given its minuscule influence on living costs and industry profitability despite the frantic bleating of The Australian’s trash economics commentators – Ergas, Sloan etc. Since the ETS is linked to the European scheme its main effect of is to cut the charge on carbon one year early. That is it. One hopes that when the European economies recover that there will not be a frantic clamouring to “protect” Australian industry from higher charges.
Carbon charging is intended to get people to reduce their use of fossil fuel based electricity – it has been somewhat effective in doing this – and to encourage supply switches to less polluting fuels such as natural gas. Liberal Party lies and stupidity, the lies spread in the Murdoch-dominated media, the fact that politicians like Kevin Rudd exist and the low charges that will now prevail make these supply changes unlikely. Eventually they will need to be made and the abrupt upward shifts in future carbon prices required to achieve this in the future will now hurt more. But that is modern politics – never do today what you can leave as a tougher problem for your successor.
We live in unprincipled times. It is important that cynicism does not take over and that the urgency of dealing with the most significant environmental issue of the modern age is not forgotten about.