The costs of climate of confusion

A reason for voter disquiet about Prime Minister Julia Gillard's carbon tax announcement is there are so many unanswered questions about how the temporary tax, to be followed by a carbon trading scheme, will affect families and businesses.

What hasn't received great attention so far is the budgetary effect of carbon pricing.

In fact, the only certain outcome from a highly uncertain carbon pricing regime will be the rapid growth of the climate-change bureaucracy.

According to some reports, the Government is considering a carbon price of $26 per tonne, which could yield $12 billion in revenue annually.

Part of this revenue grab will be siphoned straight back to low to middle-income earners through financial compensation for almost certain price hikes.  This will create a new political constituency seeking carbon welfare, in turn ratcheting up the expenditure of government.

Another part of the revenue from a carbon scheme, or existing taxes, will be spent to permanently entrench new government agencies, whose objective will be to advise, monitor and enforce the artificial carbon pricing arrangement and oversee compensation.

Documentation for the deferred Carbon Pollution Reduction Scheme, which could form a basis for the Government's future plans, called for a broad-ranging regulator to decide how to auction pollution permits and select which emission-intensive industries receive compensation.

This regulator would also act as the national carbon police, with the monitoring, investigative and enforcement powers to walk into any business to check it is cutting back on emissions as claimed.

The proposed carbon price will only build on the massive bureaucracy already built up by governments in their efforts to cool the planet.

The federal Climate Change Department was funded by taxpayers last year for $134 million and employed more than 1000 staff.  This year a new Climate Commission advocate was established with $6 million over four years.  Numerous federal agencies with no direct climate change policy involvement have set up organisational branches, research activities and conferences, including a climate change summit for rural women, to secure more funding from a climate change-activist Cabinet.

State governments have already set up more than two dozen climate change offices, agency branches, special commissions and councils.  Each state over the past few years has prepared its own climate-change strategy.  Jurisdictions have gone beyond glossy brochures and websites to enact more than 200 climate-change initiatives, all at a cost to the taxpayer, including renewable energy subsidies, which also raise household power bills.

Many local governments have actively imposed climate change planning and environmental regulations, with implications for housing affordability.

The climate change state is already here, with government revenues channelled largely into make-work schemes for bureaucrats.

If the federal carbon tax becomes a reality, the climate change state will become a much larger beast for families to contend with and fund.

ADVERTISEMENT