By Thomas Mowbray
You would be forgiven for thinking this headline is a contradiction. At face value, the two sentences certainly seem at odds.
In our country, we always think of environmental and economic concerns as oppositional. As Foreign Affairs Minister Julie Bishop stated recently, “we have to get that balance right between environmental and economic outcomes”.
We only ever talk of climate change policy as hurting the economy. We only ever talk of big business hurting the environment.
We never talk about economic policy saving the planet.
It’s time to change the conversation. We should embrace the economy and the market as a solution to climate change.
Firstly though, we need to recognise that climate change and environmental policies are not bad for markets.
They are bad for oil, gas and coal companies. But they are not bad for markets.
We always hear we should abandon climate change policies because they will hurt Australian mining businesses. That they will cause job cuts in the fossil fuel industry. That they will hurt the economy overall.
What we never hear about is the economic opportunities they also present. If profits and jobs are lost in the fossil fuel industry, they must logically be replaced by profits and jobs in the renewable energy sector.
The decline of the fossil fuel industry would cause job losses, yes. But the growth of the renewable energy sector would fuel job increases, and a lot of them.
Workers would need to retrain before moving to the renewable sector, but speaking of job losses without job gains is only painting half a picture.
Moreover, it’s time to address something that some of our more conservative politicians love to push. We always hear how renewable energies are more expensive than fossil fuels, and therefore not viable.
Is this really any surprise however, when the Government subsidised the fossil fuel industry $5.6 billion last year?
Is it really any surprise, when the Government’s Direct Action Plan allocates less than $700 million per year to combat climate change?
At this point, it becomes clear that climate change and environmental policies do not challenge the economy; they challenge the fossil fuel industry.
The solution? Stop the protectionism of a dying industry.
In addition to giving fossil fuel corporations billions of taxpayer dollars each year, the Government’s climate change plan rewards corporations for not polluting.
This is not a free market. This is protectionism at its worst.
Worse still however, is the Government’s pretence that it is coming up with ‘balanced’ policies to combat climate change and reduce pollution.
When the Gillard Government floated the Carbon Tax in 2012, the LNP Opposition cried out about the damage it would cause to Australia’s economy. Not surprisingly, the mining industry was by their side.
Here, the LNP showed its true colours. It showed the world that they were not a party that was concerned with the free market. It showed they were concerned with keeping the status quo, and not upsetting the mining giants.
Again, a carbon tax is not bad for the economy, but bad for the fossil fuel industry.
A carbon tax can, and should, be part of a free market solution to climate change. In 1977, Milton Friedman, the patron saint of modern free market economics, advocated a ‘pollution tax’.
He argued that pollution harms the population and the planet, and that corporations that pollute therefore owe a debt to society. A debt, he argued, that should be paid in the form of tax.
In this way, the polluting corporations have an incentive to minimise pollution, while paying for the damage they cause.
By the same token, a carbon tax should be applied. This would give corporations incentives to minimise carbon emissions, while also paying for their damage to the Earth that they cause.
Further, the incentives would create demand for technologies that emit less carbon, such as solar panels and wind turbines. In turn, the increased demand for these technologies would foster increased competition between renewable energy corporations, resulting in the development of better and more efficient carbon neutral technology.
These technologies, once developed, would potentially be competitive against fossil fuels even without a carbon tax. As a result, renewable energy corporations could grow internationally, as they moved into more markets with their advanced technology.
In this way, Australian corporations could grow and improve the nation’s economy. The development and spread of technology would see the creation of thousands and thousands of jobs across Australia.
This could also enable a global decrease in carbon emissions, as the competitiveness of the efficient renewable technologies undermines the monopoly of fossil fuels across the globe.
And the beauty of it all; it costs taxpayers nothing.
No subsidies. No rewards. Just less carbon.
It almost seems too obvious. It’s almost sad that it needs saying. But really, all we need to save the planet is a light touch. A soft push in the right direction.
Stop subsidising fossil fuels. Start taxing emissions.
Save the Planet. Embrace the Market.