What Prof. Ross Garnaut Has To Say About The Carbon Price

And The Charcoal On The Wall Says...

Pleiades sent me this link today. Professor Ross Garnaut had a few words to say about the way the big end of town is conducting itself in the carbon pricing debate.

Garnaut takes particular aim at BCA chairman Graham Bradley, Bluescope Steel chairman Graeme Kraehe and AWU boss Paul Howes, as well as BHP Billiton chairman Jac Nasser. He accuses them of elevating the cause of narrow business interests over the national interest.

He is also nauseated by the claims of the mining industry and its “hue and cry” against a market-based carbon price. He notes that the huge amount of money flowing into the country for the mining boom is displacing investment, and jobs, elsewhere in the country – a situation that is rarely appreciated in public debate. He accuses Bluescope and the AWU, who have been among the loudest opponents, of using the carbon price as a “scapegoat  …to duck the consequences of the resources boom.”

He reserves special condemnation for the BCA, the peak business lobby group, which has been riven by internal dissent over a carbon price, including from many members who do not accept the science of climate change. Just this week the BCA has recommended a starting carbon price of just $10 a tonne, and asked that most emissions-intensive industries be shielded completely from the carbon price – a proposal that has since been echoed by the Australian Industry Group.

Garnaut recalls the BCA’s rejection of a consumption tax at Bob Hawke’s National Taxation Summit in 1985 – the first “big outing” for the then newly formed council. “What emerged that day in Parliament House was a lesson in how vested interests can make the perfect the enemy of the good. In overreaching for an ideal outcome for themselves if not for the community, the business Council destroyed a central pillar of tax reform for two decades. They shot themselves squarely in the foot, with the country as collateral damage.”

Now, Garnaut says, the BCA has “returned to old type” in discussions about climate change policy. He recalls an anecdote about a visit to China by BCA chairman Graham Bradley in April this year, with a delegation led by the Prime Minister, Julia Gillard. “During high-level discussions with senior government and business leaders, Mr Bradley said that the Business Council would not support any carbon tax that would ‘discourage investment’ in Australia. And there should be no carbon tax on natural gas,” Garnaut writes.

But Garnaut says this approach has no logic. “There can be no carbon pricing without structural change. Structural change removes some jobs and discourages some investment. It is not logical to be in favour of a market-based mechanism for reducing emissions, as the (BCA) professes to be, and simultaneously be against a carbon price that discourages any investment. It would be as illogical as favouring productivity-raising reform but being against any policy change that discourages any investment.”

So take that, Business Council of Australia! There's more in that link, so do have a read.