Friday, October 19, 2012

Is a Carbon Tax the end of civilisation as we know it?

Most climate change contrarians will not accept the scientific view of climate because to increase the price of fossil fuels, and to subsidise the emerging renewable energy industry, would mean intervention in the market, and this is the equivalent of asking the Pope to use condoms.

In between their nit- and cherry-picking over the science (and despite their being unable to substantiate their own hypothesis) contrarians occasionally post hyperventilating pieces about the catastrophic effect that carbon taxation and higher energy prices will have on the world economy.

Their angst about the world economy mirrors the angst of us who are concerned about the effects that warming is going to have on the planet, only with less of an evidence base.

First, we need to be clear that carbon taxes or other interventions in the carbon market are not just predicated on global warming. Fossil fuel reduction also ameliorates the following problems:
  1. Ocean acidification
  2. Peak oil (which still exists, despite the increasingly desperate forays into Extreme Energy)
  3. Acid rain (which is still a problem)
  4. Air pollution, which still has major health effects
  5. Energy security - our dependence on imports of energy, which also has an impact on:
  6. Balance of payments (a major problem in the UK)
  7. Fuel poverty, which will be ameliorated by conservation efforts, reducing fuel bills
  8. Unemployment and recession (jobs will be created in the energy conservation and renewables sectors)
Eight problems, nine if we count the original one - all addressed by reduction in fossil fuel use.

So Carbon Tax does not spell out the end of world, but the beginning of a new chapter of world history. It is a way of turning 9 crises into an opportunity.

The CBI (no less) has this infographic backing the green economy, and the Green Alliance has a mass of stuff on green economics, as does the nef.
Stop Climate Chaos had a demo outside the Treasury yesterday drawing attention to 1,000,000 green jobs already created despite the Government's slovenly, whiny, foot dragging approach to greening the economy. The demonstration was covered by only one newspaper, the Guardian - further evidence of the worrying 3:1 right-wing imbalance in UK news outlets.

Energy conservation is a winner for all, since everyone knows that it saves money and energy. Most of the cost is in labour, but this could be mitigated by the Green Wage Subsidy approach.

Of course, renewable energy does have a cost. New technology always has a cost, and it is entirely reasonable, given its strategic importance, that the government should subsidy renewables. It is regrettable that the Government has chosen to impose these costs onto the energy bills, rather than taking the subsidies out of general taxation (covered by closing tax loopholes). It is regrettable also, that it has all come so late. E F Schumacher pointed out decades ago that if one is using a finite fuel, one should use the wealth it creates to become independent of the finite resource. Words of wisdom which were ignored by politicians.

Carbon taxes are much better accepted if they are hypothecated to the alternative. For instance, fuel taxes put costs to the motorist cost up, but if they are used to bring the costs of public transport down, they are better accepted.

The extra costs of renewables will fall as the technologies and markets settle down. In fact, photovoltaic electricity is already very close to grid parity (when its price equals other sources) in Italy and Spain.

The stimulus benefit of green energy measures to an economy struggling to emerge from recession is obvious to everyone except the lobotomised sea cucumbers who are running the Treasury.

In short, there is an overwhelmingly strong economic, political, moral, and social case to be made for greening the economy, and the hysterical screams of the fossil lobby can safely be ignored.

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