The carbon tax and liability

Published in The Rationalist, Vol.95, Summer 2014, as "The Death of a perfectly good tax"

When the abolition of the carbon tax was passed in the Senate in July, Tony Abbott and his collaborators were triumphant. Those who had systematically peddled the populist myth that the tax was a bad thing had apparently been vindicated. If this is not the greatest political hoax, and the greatest failure of public policy ever perpetrated in Australia, then what is?

The carbon tax was working well. It had reduced carbon emissions. It had contributed relatively little to electricity price rises. Most recent price rises had been due to extensive and unnecessary over-investment in electricity distribution infrastructure. The tax had enabled cleaner energy production to be more competitive with dirty coal-fired plants. Consumers who had been disadvantaged by the price rises had been adequately compensated through other measures. The tax was working exactly as it was meant to.

With the abolition of the tax, all this is reversed. Big coal generators will receive billions in compensation. Cleaner gas-fired electricity plants and renewable energy providers will now find it harder to compete against coal. This will happen even without any malicious tampering with the Renewable Energy Targets.

There was no damage to the economy due to the carbon tax. It was moving the economy in a positive direction. Such a tax is the textbook economic solution to dealing with pollution due to a negative externality. The cost to the environment needs to be internalised in the market. A tax is the simplest way to do it. Tony Abbott, who has studied economics, knows this.

The tax was not toxic. Its abolition is toxic. Carbon pollution will increase as a result. The budget will be worsened. Tax revenue will now have to be raised in other ways, most likely in ways that will hit the poor and benefit the rich and the big polluters. The so-called budget emergency was just another ruse.

The campaign to abolish the tax was a cynical device to dupe the Australian public to win votes. Regrettably the punters fell for it. But that, of course, was not the only motivation by the conspirators of deception. Their motivation was ideological. Market fundamentalists cannot accept that markets can fail, because the solution requires government intervention. This is ideologically abhorrent to the right wing mentality. They therefore cling to denial and rejection of scientific evidence, rather than adjusting their prejudices.

But what of the consequences of their actions, and of the long-term damage that will result? Will the climate deniers be held responsible? There have been several recent cases where former politicians have been hauled before courts and commissions to account for their actions.

One example is the well intentioned, but ill-fated, home insulation scheme. Former government ministers have been held liable for shonky workplace practices that resulted in deaths while implementing the scheme.

Ceiling batts are a better solution than foil insulation, but if foil insulation was to be installed, then a basic precaution would be to turn off the power. Are ministers vicariously liable for any workplace accident, possibly involving contractor negligence, just because a program is government-funded?

While safety training could certainly have been better implemented, there was no desire to wilfully cause harm in the home insulation scheme. Its haste was due to the economic emergency. With the abolition of the carbon tax, however, the desire to increase pollution is certainly willful and deliberate. Will the perpetrators of this outrage ever be brought to justice for the dire consequences of their actions?

The quest to impose political liability can stretch over a long period of time. Julia Gillard is still appearing before enquiries to answer for something that occurred in her professional life almost 25 years ago. So we may assume there is no statute of limitations for charges of culpability for political misdeeds. And in the case of the carbon tax abolition debacle, abundant evidence of culpability not only on the public record, but has been proudly proclaimed.

But how can damages for consequent loss be apportioned in the future? Unfortunately, we must wait for a time when the consequences of climate change are so dire that the world is forced to take urgent remedial action. When it is agreed that geoengineering is needed, then the deniers will have recanted and retreated. But they will be unable to escape blame. And Tony Abbott will be the prime target.

But he did not act alone: all members of parliament who voted to abolish the carbon tax are culpable. We may also include as liable all those who actively conspired and assisted in the campaign to get those members elected. It would not be hard to track down all those who were involved in the infamous campaign to 'axe the tax'. We should make note of all those responsible.

The consequences we are talking about are not the trivialities of current political vendettas. The financial damages of unchecked climate change will be vast. Increased costs and loss through more frequent natural disasters and loss of crop production due to drought and flood are only the beginning. When coastal inundation due to sea level rise starts to bite, civilisation will really be in crisis.

The cumulative financial cost, due to the wilful malevolence of politicians such as Abbott, will be gigantic. Of course, the problem is global and Australia is only a small contributor. But only Australia has deliberately reversed an effective and operational remedial measure, with a premeditated and reckless desire to increase the damage.

Taking into account our coal exports, Australia causes about three percent of global carbon emissions. Therefore all those responsible and complicit in the wicked campaign of destruction and deception should be put on notice: you will be held liable for three percent of all global costs. We know who you are. The damage is your responsibility and you will pay.

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