Wednesday 06 Oct 2021 | 20:48 | SYDNEY
Wednesday 06 Oct 2021 | 20:48 | SYDNEY

Climate change: The cost of our convictions


Sam Roggeveen


30 May 2008 15:45

Andrew Norton long ago put his finger on the real greenhouse denialism, which is again evident in our latest domestic phony war about petrol prices. Andrew cites public opinion research that, while showing record levels of awareness and concern about climate change, also shows low tolerance for the higher fuel and electricity prices needed to address it:

This is the greenhouse ‘denialist’ problem - not a few conservatives arguing that climate change is a left-wing conspiracy, but a public that accepts the theory but rejects the consequences of their beliefs.

Right on. Peter Hartcher drives this point home* in his SMH column today, but only in order to criticise the government and opposition for their populism. The awful truth is that they are pandering because we voters are ready to be pandered to. If we had the courage of our convictions about climate change we'd demand higher fuel taxes, with perhaps some compensation for the worse-off. How much higher? It depends on how we price carbon. John Quiggin has a stab at what it might cost you at the bowser.

Generating the political will for carbon taxes is going to be hard enough in developed countries, but is it even a solution? Back in March I wrote about the 'alternative energy paradox':

...the cheaper alternative energy gets, the lower will be the demand for fossil fuels, and hence the further oil prices will drop. So eventually, alternative energy will have to compete against a cost of oil near zero, no?

Clearly the way out of this paradox is taxation, which will keep the cost of fossil fuels high and allow alternative, non-polluting fuels to remain competitive. But that will only drive down the use of fossil fuels if their cost is uniformly high in all markets. If it's not, then the cheap fossil fuels will just go into those markets where carbon taxes have not been imposed. So that means we need to agree globally on setting a carbon tax or carbon trading. But the incentives for emerging countries are surely all in the other direction. If they can get us to tax ourselves into a low-carbon future, more cheap fossil fuels for them!

I realise a lot of this stuff will be old hat to those who've been around the climate change debate for a long time. But for those, like me, still getting their heads around it, it might be a useful discussion. Your thoughts welcome.

* Update: Actually, Hartcher doesn't address the point about people's unwillingness to pay for climate change mitigation. But he does argue that politicians ought to be pushing the debate in this direction.