European response to Australia’s abandonment of a carbon tax illuminates the impossibly narrow margin of political acceptability within which governments must work as they try to rearrange climate.
“The European Union regrets the repeal of Australia’s carbon-pricing mechanism just as new carbon-pricing initiatives are emerging all around the world,” said Connie Hedegaard, the European Union’s climate action commissioner. She called carbon pricing “the tool to make the economic paradigm shift the world needs.”
Might she have been using rejection of officially imposed hardship in Australia as cover for failure in the EU?
Australia’s parliament on July 17 became the first country to repeal a mechanism for discouraging emissions of carbon dioxide by making emitters pay for them.
The country’s tax on CO2 emissions was high enough to work, which means it stung users of hydrocarbon energy.
Australians didn’t like it. In an election last year, they replaced rule by the Labor Party, under which the carbon tax was enacted in 2012, with that of the Liberal Party, whose leader made ending the unpopular levy his priority.
Hedegaard’s statement boasted the EU has “successfully placed a price and a cap on greenhouse gas emissions and thereby shown that it is possible to trade in greenhouse gas emissions.”
The EU emission-trading scheme, though, is foundering. Partly because officials gave away trading credits in large numbers to secure support when the system started in 2005, the imputed carbon price has plummeted, forcing administrators to seek agreement on a way to fabricate shortage.
For what was to have anchored a global network of carbon markets, the spectacle is humbling.
It’s also politically tricky. Even with carbon values low, European energy costs are leaping thanks to generous subsidies governments created for renewable energy and pushed onto consumers.
Beyond elite circles, Europeans don’t fancy overpaying for energy any more than Australians do.
Australia thus might be the first democracy to yank its economy off the altar of climate sacrifice. But it won’t be the last.
(From the subscription area of www.ogj.com, posted July 18, 2014; author’s e-mail: [email protected])