Australia’s decision to dump its carbon tax reveals more about politics than the environment


Australian Prime Minister Tony Abbott. (AFP PHOTO/POOL Lisa Maree Williams/AFP/Getty Images)

Australia's Senate voted this week to end the country's contentious carbon tax. The decision was a clear victory for opponents of the tax and, more broadly, for those who oppose taking that action to fight climate change. But there's a more potent lesson that can be taken from the reversal, about the intricacies of coalition politics and the challenges of addressing long-term problems with short-term elected officials. This was, in a sense, Australia's Obamacare -- but without the immediate political benefits of the newly-insured.

Let's stipulate, in accordance with the science, that climate change is occurring as a result of increased concentrations of greenhouse gases in the atmosphere, including carbon dioxide. Carbon dioxide (which everyone somewhat lazily just calls "carbon") is produced largely by burning fossil fuels, often for electricity production. There's some potency to the issue of climate change in Australia, which has seen longer, more pronounced droughts in recent years that scientists have linked to climate change. And, therefore, linked to those emissions.

Carbon taxes like Australia's are a tool meant to help reduce atmospheric concentrations by increasing the cost of emitting carbon dioxide (for which there is generally has no cost). Make it cost something, and CO2 producers are motivated to reduce the amount that's produced. It's a long-game strategy, meant to slowly shift the country's economy to one that produces less carbon dioxide. It's a strategy that has been supported by even such unlikely parties as fossil fuel company Exxon Mobil.

A 2011 ad supporting a carbon tax in Australia.

Which brings us to 2012. Australia's political left had pushed for action on climate change for years, but battled opposition from industries that would bear the costs. For politicians in Australia -- as elsewhere -- it prompted a tricky balance between hearing out a passionate and vocal interest group and listening to arguments from businesses worried about the effects on the economy (and their bottom lines). It meant a politician's least-favorite balancing act: present versus future. As the New Yorker's James Surowiecki noted in the wake of Hurricane Sandy, "it’s always easier [for a politician] to shell out money for a disaster that has already happened, with clearly identifiable victims, than to invest money in protecting against something that may or may not happen in the future."

When Australian Labor candidate Julia Gillard ran for prime minister in 2010, she was explicit about the carbon tax: No. Not under her watch. Except that Gillard didn't have enough of a coalition in Parliament to win. So she made a deal with the Green Party, including an agreement on proceeding with a carbon tax. With support from the Greens she won, and suddenly Gillard was advocating the tax. In 2012, it became real.

Even before it was enacted, Gillard's opponents were using the tax to bash her. It was successful in its goals: greenhouse gas emissions dropped and carbon emitters had robust government subsidies to prevent their taking a significant hit. (One assessment of the repeal labels electricity producers as "losers" because they'd lose those subsidies.) But prices for gasoline and electricity went up. Which was enough of a short-term economic hit to easily outweigh the long-term, hazy threat of climate change in national politics.

When the tax went into effect, Tony Abbott of the (conservative) Liberal party pledged its repeal, should his party gain power. (At one point Abbott called climate science "absolute crap," though he insists he believes in climate change.) "Repealing the Carbon Tax will ease cost of living pressures on families, help small business and restore confidence to the economy," the party wrote. Opposing the tax became a central argument to his electoral prospects, and, when an election was called at the end of last year, Abbott won. Even before he took office, he pushed for the repeal to begin. And so it was repealed.

The parallels between this fight and the fight over Obamacare should be obvious. After a series of touchy political compromises, a policy meant to address an endemic problem over the long term is passed. It immediately becomes a focal point of opposition, with calls to repeal it. In both cases, the controversial policy move quickly overlapped with electoral politics.

The difference in Obamacare is that there is a large and still-growing pool of beneficiaries -- people who got new healthcare coverage or cheaper healthcare coverage and who would not be happy if the overall program was actually repealed. Abbott and opponents of the carbon tax don't need to worry about that. The negative effects of climate change and its causes are widely distributed across the world, and the beneficiaries -- largely future generations -- aren't in a position to vote.

Last October, shortly after Abbott took office, a series of wildfires swept across New South Wales. Abbott toured the scene, calling a link between the blazes and a warming climate "hogwash." The government paid thousands of dollars to victims of the fires. Politics continued as usual.

Philip Bump writes about politics for The Fix. He previously wrote for The Wire, the news blog of The Atlantic magazine. He has contributed to The Daily Beast, The Atlantic, The Daily, and the Huffington Post. Philip is based in New York City.
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