Australia needs to resist Biden’s climate bullies

The US made it clear after last week’s climate summit that if Australia doesn’t tax carbon, they’ll do it for us.

The Biden administration is considering a scheme that would levy a carbon tariff on Australia. A carbon tax or tariff would kill jobs. We should instead embrace science and innovation to safeguard our economy while protecting the climate.

If carbon taxes are enforced, our energy industry will face a significant rise in unemployment and businesses will close. Coal is Australia’s second largest export, making up 3.5 per cent of Australia’s GDP. That is $69.6 billion — what we earned on coal exports in 2018/19 — we cannot spare.

Surviving businesses can only hike up prices to maximise their profits, but this penalises consumers who suffer a higher cost of living.

A hike in prices will affect everyday consumers, but working-class Australians would suffer the bigger blow from a carbon tax. Australians in manufacturing, agriculture and construction may lose their livelihoods.

To make things worse, carbon taxes distort the market as the price of carbon no longer reflects the true value of products. Consumers and market agents end up making choices based on the tax on a product. It is imperative we acknowledge taxes are not real resource costs. Tax can only facilitate the movement of money from the private to the public sector, and the public sector is hardly the most flexible or creative.

By draining money from the private sector, a carbon tax reduces the potential for innovation in the energy sector as well as across the economy. They push us away from science and toward unemployment, lower GDP, and slower economic progress.

Radical climate activists believe in sacrificing livelihoods because they think the world is ending in 12 or so years. Thankfully, more rational minds realise climate change is a long-term concern, a problem which innovation can fix.

For example, the black coal industry in Australia has invested $550m in Low Emission Technology Australia (LETO). So we have useful technologies like carbon capture and storage, air ventilation to catch methane (a greenhouse gas more potent than carbon dioxide), and clean hydrogen production.

People care about the environment, and businesses which care about pleasing consumers, will react accordingly. There is money to be made cleaning up our environment.

But R&D requires lots of money. And businesses can’t rally those resources when the economy is faltering and tax bills are crushing. A carbon tax will handicap us. If our leaders are truly worried about climate, they must guard our energy industry against foreign fines.

A carbon tax is just another tax take to line the pockets of greedy government departments.

Science and innovation, not tax increases, will stop climate change. When Australians are worried about keeping the lights on, they can’t fret about melting glaciers.

Environmental taxes sabotage our economy and lower standard of living, making it impossible for us to fight climate change. Australia must stand against foreign climate bullies.

This article first appeared in print in the Daily Telegraph (page 13) on 29 April 2021