We are writing on behalf of Sustainable Living Armidale Inc. (SLA), a broad-based community group, established four years ago in response to the challenges of climate change and peak oil. We have over 400 people on our email list and many more who log into our web site: www.slarmidale.org. We hold monthly public forums, show films, hold a monthly information stall, and have action groups to promote local initiatives. This submission has been written by members of the Energy action group; it reflects our core values.
Cut emissions
It is vital that we cut our emissions in order to minimise climate change and transition to a green economy that will be more competitive and sustainable in a carbon constrained world.
Opportunities not currently being realised
Australia, among all countries, has the greatest renewable energy potential: wind, sun, geo-thermal, tidal, wave, hydro—we have them all. There is every reason to expect that, in time, Australia could be producing all its energy from renewable sources but the current rate of development of clean energy alternatives is frustratingly slow. Some countries are investing widely in renewable energy, but this is not the case in Australia and we are falling behind. It is the responsibility of government to remove barriers currently constraining this development and to actively support the transition to renewable energy, which is vital if we are to remain competitive. The successful adoption of low carbon technology and best practice could place Australia in a strong position to attract energy-intensive industry from overseas.
Mandated emissions reductions
To avoid catastrophic temperature rises, we recommend setting a long term target of a 90% reduction in emissions (from the 1990 levels) by 2050.
Design of the tax
If the government has decided to introduce a carbon tax, as a transition to an eventual cap and trade scheme, the design of the scheme is critical if it is to succeed in achieving genuine reductions. We recommend the tax be broadly applied to large scale emitters without exceptions.
We recognise there are a few trade-exposed industries that in the short term might become uncompetitive and need some form of assistance, but this need not be free permits. Support could be in the form of other tax breaks for adopting less polluting technologies or support for research and development of low emissions technology. Any compensation should be conditional on evidence of strategies in place to reduce future emissions. Assistance must be on a case-by-case basis that looks at a company’s entire operations.
It is counter productive to issue free permits to big polluters. The less they receive in compensation, the more incentive they have to act quickly to reduce their exposure to the tax, which after all is the point of the tax. Therefore, we do not support free permits for the electricity sector. They have known for two decades that there will be a price on carbon so they should not be compensated for loss of assets or for inappropriate investments.
Revenue from the tax
A properly drafted carbon tax should unleash a wave of investment in wind and solar energy projects. Since its main function is to facilitate the replacement of fossil energy by clean energy as quickly as possible, this should be the chief consideration in deciding how best to spend money raised by the tax.
1. A national feed-in tariff, at a sustainable level, is one of fastest ways of insuring investment in renewable energy. Removing all taxes on renewable technology (both manufacturing and installing) for a period of years is another option.
2. Investment in the grid infrastructure, eg. a smart grid to support distributed electricity generation and wise extension of the grid to areas where renewable energy is most effectively produced.
3. Training programs to help develop a workforce skilled in renewable energy that targets communities most affected by the transformation of the economy. While some jobs will inevitably be lost, as in the decommissioning of the worst of the coal-fired power stations, development of renewable energy will create many new jobs, leading to a substantial overall gain in employment prospects.
4. Assistance only to low-income and vulnerable households. While some level of compensation may be desirable, emphasis should be placed upon educating householders in the potential savings from more efficient energy use, and possibly some assistance in replacing appliances such as electric hot water, electric bar heaters and inefficient refrigerators. Overly-generous compensation to households removes the incentive for the behavioural change that would lead to substantial energy-efficiency savings.
Further comments
Although we recognise agriculture will not be included initially, it should be included in the carbon trading scheme when it is implemented.
We urge strong restrictions on any further deforestation, and strict emissions standards to discourage the development of new coal-fired power stations. There also need to be rigorous fuel efficiency standards legislated for all new motor vehicles. While some gas-fired plants may be needed as a transition fuel, we do not support the extensive uptake of gas. It is not renewable and it is another high emissions fuel. Furthermore, gas mining poses serious environmental dangers.
It is counter productive to continue paying substantial subsidies for fossil fuel use, including mining; these perverse incentives should be wound back as a matter of some urgency.
A creative use of tax incentives and disincentives could be used to great effect to encourage desirable behavioural change.
In general, we support a carbon tax but one that has enough bite to make a real difference in the levels of harmful emissions and creates an environment favourable for renewable energy to complete.
Patsy Asch and Jo Leoni: the Energy Group, Sustainable Living Armidale inc.
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