VOTERS are rightly suspicious of a carbon tax. The task for the Government is to get people to understand its carbon scheme and for the scheme to be fair. It has to involve people. Here is an idea that might just do that.
Most carbon-trading schemes involve the big polluters, big companies and large institutions. Why are individuals left out? No wonder they feel they are about to be done over.
What about a scheme in which individuals take part and take responsibility for their carbon consumption?
Let’s aim, say, for carbon emissions at 1990 levels. Work out what that was and divide it by the population. Say it comes to 15 tonnes per person. The director of the Centre for Climate Economics and Policy at the ANU’s Crawford School, Dr Frank Jotzo, has suggested a price of around $60 – nearly twice the world rate, but if you are going to be serious you need a high rate.
That is $900 worth of carbon per person, say $1000 – about $20 billion a year. The government then imposes its carbon tax which will add on average $1000 to each individual’s living costs.
Now instead of providing compensation through tax cuts or welfare, why doesn’t the Government issue a credit card (like the Medicare card, or perhaps combined) with $1000 worth of carbon credits on it – say 100,000 credits at one cent each.
All goods and services would have a carbon impost on them related to the amount of carbon used in their production. Much of this carbon-assessment work is being done now. Adding the impost to invoices would be just like the GST. At purchase, you could use your carbon credits to pay the carbon impost or pay cash if you have run out.
People could buy and sell their credits, perhaps at ATMs, for whatever price they want.
A family of four would have $4000 worth of credits each year. Everyone would get the same amount, whether tycoon to pauper.
It seems fiddly. It will require a fair amount of work, money, computer technology and public education.
But we have issued Medicare cards to everyone before. We have introduced the GST on virtually every purchase and it is usually separately itemised, just as the carbon tax would be. The technology is there.
The scheme – let’s call it the Community Carbon Scheme — has many advantages.
The biggest advantage is that people will see that the less carbon they consume, the more credits they will keep to sell to others or cash in with the government at the end of the year.
If you tax something or make people pay for something they are more careful about using it. The direct carrots-and-sticks nature of this scheme is more likely to result in a change in behaviour to lower carbon consumption.
Other advantages are that people will not feel they are copping just another great big tax, like the Coalition’s GST, Medicare surcharge and gun levy. All of these were sound policies but they were harder to invoke because they came as taxes.
Under this scheme people will have up front the tradeable credits which they can sell whenever they want.
The scheme could embrace people earning further credits for planting trees or other recognised carbon reducing activity.
As things stand, though, the Government is having a great deal of trouble persuading people of the need for a tax; how it will work; and why they won’t be worse off.
Before the 2007 election, opinion polls showed up to 70 per cent support for action on emissions. At that time, both major parties supported a market-based system to reduce emissions, even if it took a while for Environment Minister Malcolm Turnbull to persuade a majority of his Coalition colleagues.
Opinion polls now are showing more than 50 per cent opposition. Of course, that happens when the two major parties disagree which they now do since the Coalition changed its tune on carbon. After a while, the great majority of voters – sheeplike– take the same position on a given issue as the leader of the political party they support. Nonetheless, the change in opinion is also due to government failure to set out its case.
It maybe that the Government is borrowing former Prime Minister John Howard’s GST strategy. Howard announced he would introduce his tax – the GST — and then filled in the details much later. It is a dangerous course. Howard went from a massive majority in the 1996 election to almost losing the 1998 election. And Howard, like Gillard, was also going back on an election promise.
Another danger for the Government is the feeling that the big polluters will get massive compensation and individuals will not. Indeed, when former Prime Minister Kevin Rudd was working out his scheme the planned compensation for the big polluters would have made the whole carbon-reducing scheme hardly worth it.
Big corporations have the ear of government because they make large donations, but they could be stared down with the Community Carbon Scheme under which everyone could be a carbon trader.
Further, once you provide carbon credits equally to everyone to match the carbon result you want, that is the totality of compensation needed. The shareholders and employees of big polluters will get their compensation as individuals.
If people turn away from high-carbon goods and services because of the tax, good. That is the aim of the tax.
An example of a similar scheme to the Community Carbon Scheme was proposed by Telstra in the late 1990s to deal with the rising costs of the free directory assistance service, then running at $210 million. The idea was to charge for directory assistance, similar to the carbon-discouraging carbon tax. The compensation was to be $5.40 off phone rentals, equivalent to 102 directory assistance calls a year – two a week – for each phone. This was similar to the carbon-credits card.
Those who did not use all their directory-assistance compensation kept the balance. Overall, though, the 50 cents charge would deter people from overusing directory assistance and encourage them to use the paper or online directories and Telstra would reduce its service costs. Alas, the Government, then majority owner, knocked the scheme on the head.
Of course, a lot of detail on the Community Carbon Scheme would have to be worked through, particularly on imports and exports. And the usual scare campaigns would have to be dealt with – at least they would not be as easily manufactured as the “great big tax” slogan.
I must add that the original idea of this scheme is not mine. It came from one of my siblings and I have merely tweaked it. Be warned. Try to avoid having a journalist in the family – ideas from anywhere are fair game.
CRISPIN HULL
This article first appeared in The Canberra Times on 26 March 2011
Brilliant idea, if i’ve understood correctly; low-income people who generally have the smallest carbon footprint, would come out on top for a change!
Maybe then politicians might finally recognise and be prepared to encourage the environmental benefits of low-income lifestyles. They might stop discriminating against the unemployed and start giving them and their student cousins, safe places to live and enough money to live on.
There is no reason that we can fathom, why all people over 18yrs of age, who are living indpendently on Centrelink benefits, should not receive the same weekly/fortnightly income, regardless of age, ability or marrital status, provided that those who are not aged or disabled are prepared to undertake voluntary community work, work experience, or study. An independent Youth has the same basic needs as an adult and all adults have the same needs. Why do politicians so often seek to blame and punish the unemployed, who are they trying to placate? The big spenders and the high polluters . . .?
Think how much easier and cheaper the administration of Social Security would be if all basic benefits were equal, and if their role was to find voluntary work, work experience or study for the unemployed, like the old CES.
The Community Carbon Scheme is excellent from many perspectives, this article should be required reading for all politicans. Please congratulate your sibling. Cheers, Robin & Traz