When the government was finally successful in repealing the carbon tax in July, it cemented our place in history: the first developed country in the world to remove a price on greenhouse gas emissions.

As the world’s worst polluter per capita, it is important that Australia leads the charge when it comes to taking action on curbing emissions and tackling climate change, yet the step to remove the tax has been largely condemned here and abroad.


John Connor, The Climate Institute CEO.

John Connor, CEO of The Climate Institute, was particularly scathing. “Australia not only lurches to the back of the pack of countries taking action on climate, but sees the responsibility of emission reductions shift from major polluters to the taxpayer,” he says. 

“Australia is bereft of credible climate policy just as the international community focuses on deeper reduction targets for 2025 and 2030.”

The repeal of the tax came shortly after The Climate Institute released findings highlighting that despite the government’s claims to the contrary, our carbon laws had resulted in a reduction in pollution, cleaner energy and a growing economy. In fact, experts here and overseas suggest that putting a price on carbon is still the best way forward, if it’s done correctly.

“Many energy prices in many countries are wrong,” states the International Monetary Fund’s report, Getting Energy Prices Right. “They are set at levels that do not reflect environmental damage, notably global warming.”

The IMF study highlights how policy makers can go about quantifying harmful side effects of energy use, and what this implies for corrective taxes on coal, natural gas, gasoline and road diesel, for over 150 countries – action that could significantly reduce preventable pollution-related deaths as well.


Christine Lagarde, IMF managing director.

In her address at the Center for Global Development, Christine Lagarde, IMF managing director, likened the environmental crisis to one of the greatest crises facing our generation. “It is also the issue upon which future generations will judge us,” she says.

“If we do nothing, we face a future that is grim indeed. Our fortunes will melt with the ice, evaporate like water under a relentless sun, and wither away like sand in a desert storm. And the planet’s poorest and most vulnerable people will be the first to feel the pain.”

Lagarde says we need to go well beyond the elimination of direct cash subsidies (such as the government’s flagship Direct Action policy), and make sure that energy tax systems around the world properly reflect environmental side effects. “On this point, let me be crystal clear: we are generally talking about smarter taxes rather than higher taxes.” (To read Legarde’s full address, click here.)

Backwards in the face of crisis

Ross Garnaut, the architect of Labor’s carbon pricing scheme, says Australia is now going to be a drag on the world efforts to tackle climate change. “There’s no doubt that Australia is out of step,” he told The Conversation. “First of all, out of step for not dealing more strongly with the issue of climate change – you can reduce emissions and play your full part in an international effort without a market-based mechanism, it’s just that the alternatives are more expensive, more difficult, and less certain to deliver good results than an emissions trading scheme or broadly based carbon pricing in other forms.”

Garnault also lamented the lack of any alternative mechanisms, citing the government’s Direct Action policy, as presented in its White Paper, is no real way forward.

Even actress Emma Thompson weighed in Australia's inaction, with this image of her going viral.

Even actress Emma Thompson weighed in Australia’s inaction, with this image of her from a Greenpeace Arctic expedition going viral.

Of course, the Abbott government also had its pre-election commitment to the Renewable Energy Target to fall back on*. This has proved to be short-lived, however, with the government commissioning a (so-called) independent review into the RET**, headed by Dick Warburton, to assess its impact on electricity prices. (When the review was announced earlier this year, many questioned having Warburton at the helm, suggesting he was a ‘climate sceptic’, a claim Warburton denied … in fellow sceptic Rupert Murdoch’s The Australian newspaper)

Business groups have been vocal opponents of the RET, calling for it to be scaled back because of risks that it will drive up electricity prices and create job uncertainty. But modelling commissioned by the review suggests that sticking with the RET would increase household energy costs initially (averaged to $54 over the next six years), but will reduce over the following decade (averaged to $56) to $91 by 2030.

Reviewing this modelling with the evidence from business groups, Peter Martin, economics editor at The Age, says the review had found little economic damage from the RET, not to mention the reduction in pollution and the green energy investment opportunities and considerable benefits, and was reportedly set to recommend that the scheme stay.

But despite the positive outlook of the RET, from the review’s own research, it has now been reported that the targets won’t just be scaled back. Instead, the Abbott government is planning on scrapping the RET altogether.

The news is not only another blow to Australia’s environmental standing on the world stage, it’s a major blow to the renewable energy companies and investors that were banking on the 2020 targets. Environment groups suggest the removal of the RET will threaten more than $10 billion in investment, 5000 existing jobs and 18,000 jobs into the future.

So, at a crucial time when we must be taking action to reduce the threats to the environment, and after Australia led the charge to tax polluters, we now sit at the back of the pack. Our government is telling us and the world that our economy is more important than the future of our environment. “Climate change is a significant global issue; it is a very significant global issue. Is it the most important issue the world faces right now? I don’t believe so,” Tony Abbott said during his visit to New York in June this year. “We will do our bit. We will be a good international citizen. What we are not going to do is clobber our economy and cost jobs with things like a job-killing carbon tax.”

Unfortunately, time will surely tell what will be clobbered by our inaction.

* The RET was set up by the Howard government in 2001, which mandates that at least 20 per cent of Australia’s electricity be sourced from renewables by 2020.

**Since publishing this post, the report on the government’s review into the Renewable Energy Target Scheme has been publicly released. Click here for full version or executive summary of the report.

~ Opening cartoon by John Cook, via skepticalscience.com


One Response to “Australia goes backward on climate change”

  1. Julian Skilgarde says:

    This situation is just totally depressing. Renewables are a growth industry in Australia and employ many people, but the government wants to close them down. It doesn’t make economic sense, unless you just wanted to prop up the fossil fuel industries. Coincidentally, they donate large sums to the coffers of the Liberal Party.

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