Global warming crisis: Labor proposes cash handouts to worst polluters

By Shua Garfield

“We cannot continue to pour carbon pollution into the atmosphere as if there is no cost … Climate change threatens our food production, agriculture, and water supplies.” With this dire warning, the minister for climate change and water, Senator Penny Wong, released the federal government’s Carbon Pollution Reduction Scheme green paper on July 16. However, the proposals outlined in the paper are not a recipe for serious action to avoid the climate change disasters that Wong warns of. Instead, the paper is largely a plan to hand out money to the worst polluters.

The green paper declares the government’s “climate change strategy” to include a target of 60% reduction in carbon dioxide emissions by 2050, relative to 2000 emission levels. The chief mechanism proposed is an emissions trading scheme, to begin in 2010. Neither the target nor the method are an adequate response to the growing global warming catastrophe.

The 60% emission reductions target by 2050 is based on an estimate of the global cut in CO2 emissions necessary to stabilise the atmospheric CO2 level at 450-550 parts per million (ppm). The draft Garnaut Climate Change Review, commissioned by the Labor Party and released on July 4, recommends this to keep the increase in average global temperature below 2-3oC. However, according to the report released in April by a team of NASA scientists led by Goddard Institute of Space Studies director James Hansen, long-term stabilisation at 450 ppm would likely lead to a 60-metre rise in sea levels, while 550 ppm carries a significant risk of an increase of up to 6oC in average global temperature.

Hansen argues that the only way to avoid runaway global warming is to stabilise atmospheric CO2 at 350 ppm. It is already above that level — 385 ppm, and rising by 2-3 ppm a year. Thus, immediate action is required not only to make deep cuts in emissions, but also to remove carbon from the atmosphere.

Even the inadequate “60% by 2050” target is not likely to be achievable by a carbon emissions trading scheme. In these schemes, capitalist governments auction a limited number of “carbon pollution permits”. Corporations compete to purchase a permit, which entitles them to emit a specified amount of greenhouse gases. The corporations that value carbon permits most highly will pay more for them, providing the government with money that it will supposedly use to combat climate change. Other corporations may find it cheaper to reduce emissions.

Carbon-trading schemes are the method of choice for the governments of wealthy capitalist countries because they can easily be manipulated to prioritise the profits of polluting corporations over environmental benefits. Where they have been implemented, they have failed to encourage big business to reduce carbon emissions significantly.

The one major test of carbon trading on an international level has been the European Union scheme, which began in January 2005. At its outset, emissions licences were granted free of charge to established corporations. Allocations were largely based on estimates prepared by the corporations themselves, resulting in permits that, in some industries, exceeded real carbon emissions by up to 50%. After only 16 months, the price of carbon credits collapsed. Buying the “right” to pollute has remained far cheaper that investing in cutting emissions.

A similar scheme in NSW, which began in January 2003, collapsed in September 2007. As in the EU scheme, the decline in the cost of carbon credits was largely the result of the free issuing of credits to companies that had done nothing to reduce emissions.

Handouts for big business

Similarly, the carbon trading scheme proposed in the Rudd Labor government’s green paper rewards existing polluters. At its outset, up to 30% of permits will be given free to “emission-intensive trade-exposed industries” (i.e., highly polluting firms that compete internationally for profits). Corporations that emit more than 2000 tonnes of CO2 equivalent per $1 million revenue will receive 90% of their permits for free. According to the July 17 Sydney Morning Herald, these include BHP’s BlueScope Steel, which announced $116 million in after-tax profits for the second half of 2007, and cement manufacturer Adelaide Brighton, which announced a $113.9 million profit for the 2007 calendar year.

Corporations that emit 1500–2000 tonnes of CO2 (or equivalent amounts of other greenhouse gases) per $1 million revenue will receive 60% of their permits free. These include BHP Billiton and Rio Tinto’s alumina refineries. BHP Billiton’s profits for the 2006-07 financial year were US$13.4 billion, while Rio Tinto’s profits for calendar year 2007 were US$7.31 billion. Corporations that run coal-fired electricity power plants will also receive government assistance, though the details of this have not yet been revealed.

The purpose of all these handouts to the biggest polluters, according to the green paper, would be “to ameliorate the risk of adversely affecting the investment environment”. By promising to cater for the “investment environment” rather than the environment people live in, the Rudd government is signalling its intention to hand out public money to ensure increased investment in coal-fueled electricity production, when what is needed is for these plants to be phased out of operation. The Rudd government’s plan would also smooth the way for privatisation of the remaining publicly owned coal-fired power stations, currently being pushed by the NSW Labor government.

The Rudd government attempts to sanitise its position by promising to spend revenues from the sale of emission permits on “clean coal” technologies. The main proposed technology is “carbon capture and storage”, in which CO2 emissions are stored underground. It is yet to be tested whether this expensive experimental technology can permanently store CO2, much less be applied to a significant proportion of large power plants. Meanwhile, actually existing clean energy options, including large-scale solar thermal and geothermal electricity production technologies already available, receive little mention in the green paper.

To “help Australian households … adjust to the scheme”, the government promises to assist low-income earners through tax relief and increases in pensioner, carer, senior and unemployment benefits. Labor also promises to provide “consumer information to help households take practical action to reduce energy use”. Elsewhere the green paper makes clear that household consumers are expected to adapt to price changes by changing consumption patterns.

Reducing energy waste is an important part of reducing greenhouse gas emissions. However, by making individuals responsible for reducing their personal energy use, government and business seek to avoid their responsibility for the polluting ways in which electricity and other goods are produced. It is absurd and hypocritical for the government to call on individuals to use their petrol-fuelled cars less when it has no intention of providing the expanded free public transport that would make such a change realistic. It is equally ridiculous to hector individuals to reduce their electricity use while allowing big business to continue reaping mega-profits from the burning of coal, and refusing to massively increase renewable energy infrastructure.

Good examples

Small, relatively poor Cuba provides a far superior example of how to reduce energy consumption while maintaining living standards. In 2005-06, the Cuban government mobilised 30,000 social workers, many of them university students on study leave, to install 9 million energy-efficient light globes and replace millions of obsolete electrical appliances with low-energy ones. By mid-2006, this program had cut electricity for lighting by a third. Cuba is the only country in the world to have implemented a universal low-energy, low-polluting lighting policy.

To reduce reliance on cars in the early 1990s, the Cuban government imported 1 million Chinese bicycles and sold them at highly subsidised prices. Public transport is also highly subsidised. Cuba has developed its own photovoltaic solar panel manufacture. Solar power provides electricity to off-grid rural areas, including several hundred hospitals and community centres and more than 2000 schools. Between 1959 and 2006, reforestation campaigns increased forest coverage from 14% to 24.3% of Cuba’s land area.

In 2006, the World Wildlife Fund declared Cuba the only country in the world that enjoys sustainable development. Cuba has achieved this unique distinction, despite being subjected to a vicious economic blockade by the US government, because it does not allow its mines, factories, power plants and agricultural land to be controlled by capitalist corporations. These resources are publicly owned and managed in the interests of working people, and can therefore be subject to a national plan designed to meet the needs of the majority, rather than delivering profits to a tiny minority of wealthy business owners.

With the coming to power of a working people’s government through a popular revolutionary uprising in April 2002, Venezuela has started to achieve similar gains. In November 2006, President Hugo Chavez launched an “energy revolution” that included mobilising youth to distribute 52 million energy-efficient light globes and to install wind, solar and natural gas electricity systems. Through “Mission Tree”, launched in June 2006, the Venezuelan government had, by the end of May, reforested 38,200 hectares with more than 33.5 million trees.

What is needed?

Venezuela, like Cuba, has been able to implement such measures because it has a working people’s government that is leading an anti-capitalist revolution. The revolutionary government is mobilising working people to take the political and economic power previously monopolised by a wealthy minority and use it to address social needs. The fact that Third World countries like Cuba and Venezuela can achieve such advances suggests that a wealthy First World country like Australia could achieve even more if it also had a government that represented the interests of working people.

A first step for such a government would be to takeover the ownership of the fossil fuel industries and phase them out. No-one should have the right to profit from activities that endanger the health and livelihoods of the majority of the present and future generations. The corporations that own these industries receive $9 billion annually from the federal government in tax breaks and subsidies; they are being paid to destroy the conditions that are needed to sustain life on our planet. The resources handed out to these businesses could be used for a massive public program of creating renewable energy infrastructure, energy efficiency measures, public transport and sustainable agriculture.

A working people’s government could use Australia’s productive resources not only to reduce drastically the country’s own carbon emissions but also to help reduce those of other countries. Rather than spending billions on invading and occupying Iraq and Afghanistan to secure cheap oil for the big energy companies, a socialist Australia could provide genuine international solidarity. It could follow the example of socialist Cuba, which currently has 30,000 health professionals providing free health care in 68 different countries, by sending expertise and technology to help poorer countries develop renewable energy.

Such changes are not going to be delivered by a political system that limits ordinary people’s participation to being atomised voters, casting a ballot once every few years, while protecting the “right” of a few super-rich families to make all the decisions that matter. Only a revolution that gives working people collective control over the economy, destroying the institutions that defend the power and privilege of the capitalist minority, can open the way to the profound changes that are needed to avoid climate catastrophe.