by David Shearman
We are struggling through a labyrinth of ideas and pressures in our search for progress. However long we wander in this maze there is only one way out and the exit sign says “economic reform”. Free market liberalism which has ruled our lives for several decades is on the nose, it failed on the promise it could regulate itself and brought misery to millions. The views of discarded economic theories of JM Keynes are making a come back; they are apparent in the pleadings and cajoling of some governments but not as yet in the actions of bankers and financiers who continue on their merry way.
Keynes was interested in philosophy and the arts; he came to economic theory to help solve the social problems of the 1930s, and this is as it should be today; economics was not an end in itself, a wealth creation mechanism. Like Keynes we should not be reticent as doctors and scientists from involvement in a subject that needs lateral thinking and a social and ecological basis. So, as we wander through the maze searching for energy saving light bulbs, powered by solar panels, we come to the end point that economics and the market rule our lives. To the scientific mind economics is a boring and irrational topic, but it is too enmeshed in the potential solutions to climate change to be ignored. We face the problem that the proponents of free market liberalism have such a powerful hold on Western governments that solutions such as an ETS (CPRS) can be eviscerated even before becoming law.
The fundamentals are that government has to pass laws to ensure that emissions are reduced. Two methods have been debated, an emissions trading scheme, the form of which is subject to all the persuasive mechanisms of market proponents, and a carbon tax which relies on the resolve of government.
An ETS in operation in Europe for some time has not been successful to date.
The Australian ETS is likely to be minimal in its effect because permits to pollute have been part of the deal.
Let us be frank, an effective ETS has to squeeze the polluters till the pips pop out so they diversify and contract thus reducing emissions quickly commensurate with the urgency of the situation. DEA has supported the proposed ETS because an inadequate step forward seems better than no step at all.
To understand the problems with an ETS, I urge you to read the article Selling the environment in order to save it? by Frank Stilwell Professor of Political Economy at Sydney University. http://www.earthsharing.org.au/2009/03/23/sustaining-what/ This was written before the final Garnaut report was produced and explains that the CPRS is at the heart of economic orthodoxy (this means belief) as recommended by Garnaut. Stilwell argues that an emissions trading system hands over the market to private interests and thereby creates a powerful political lobby with an economic stake in shaping how the market operates. This is illogical when markets created the present environmental stresses in the first place.
James Hansen’s views are always worthy of consideration for they are based on an impeccable scientific reputation. Hansen has favored a carbon tax for some time. He welcomed the failure of Copenhagen because it offered an opportunity to change direction.
“Last weekend’s minimalist Copenhagen global climate accord provides a great opportunity. The old deceitful, ineffectual approach is severely wounded and must die. Now there is a chance for the world to get on to an honest, effective path to an agreement.
The centrepiece of the old approach was a “cap-and-trade” scheme, festooned with offsets and bribes – bribes that purportedly, but hardly, reduced carbon emissions. It was analogous to the indulgences scheme of the Middle Ages, whereby sinners paid the Church for forgiveness”.
Frank Stilwell explains the virtues and problems of the carbon tax;-
“With a carbon tax, on the other hand, the key relationship is directly between the government and consumers. Adjustments to the tax rate in the light of experience would be politically contentious no doubt, but less problematic than having a powerful business lobby directly contesting any attempt to reduce their number of tradeable emissions permits”.
The carbon tax keeps control of the situation through elected government, but government doesn’t want this, for it might be blamed if things go wrong. In the eyes of government it is dangerous to their position to own banks that might fail, or carbon reduction schemes for which there is no intermediate player to blame for failure.
But a carbon tax is also subject to political need. President Sarkosy’s fire from the belly about what should be done was promptly quenched by the French constitutional system. France’s constitutional court rejected a proposed tax on carbon emissions, saying a web of exemptions violated the principal of equality and rendered efforts to cut greenhouse gas emissions ineffective. To make the tax more palatable, the President partially or fully exempted power plants, public transport, airlines, farming and fishing, as well as 1,018 older cement, steel and glass factories. The political manipulation of Liberté, égalité, fraternité was unacceptable!
So we have come to the end of this discussion. At the top of world power is still the triumpherate of market, corporations and financial institutions. A distant second are the democratic governments where everyone can have their say but big decisions on incremental threats are nigh impossible. But wait, this is a three horse event; coming up fast on the inside is the People’s Republic of China which controls its market. It is promoted by our profligacy and consumerism. It can and will make decisions for its own survival, but what sort of world will it create?
As we wander interminably through the maze we have passed a concealed exit on many occasions. This exit is labeled “To reformed democracy”. I have ventured through this exit once before and failed to stem the fire and brimstone. To constructively criticize democracy makes one an eco-fascist to the “left” and a fellow-traveler to the “right” and no-one is courageous enough to tackle it. Life for the majority is still too good and the New Year sales are on.
The non-medical reader may well ask why a medical doctor should write on this topic. According to WHO climate change imposes the biggest health threat to humanity. Controlling greenhouse emissions is appropriate medical treatment.