Bottom-Up Or Top-Down On Carbon And Climate Change?

by Tony Sinclair

It's a pity the Government has taken the ETS off the table until next year, because the ETS was good policy.

I see the carbon-reduction debate as a decision between incentivising green behavior throughout the economy, or, mandating a centralised service that government is manifestly ill-equipped to provide.

Pricing carbon emissions gives big business a budget imperative to decide how much they are able to pollute. Therefore, business is compelled to find cheaper *and* greener ways to deliver goods and services.

With big business also incentivised to purchase from suppliers who have in turn adopted green practices, so carbon-friendly policy filters through the economy and awareness is raised for the end-consumer, a win-win for the economy and the environment.

By contrast, the Opposition's centralised emissions rebates are prone to policy influenced by minority interest-groups, creating pork-barrel budget waste in marginal seats, with potential for outcomes uncorrelated to the policy's purpose.

My fundamental problem with the centralised model is it does nothing to filter green progress through the economy by incentivising change in consumer behaviour. That is, people will be paying marginally more for goods and services, but getting an identical outcome - lightbulbs that glow and petrol in their tanks.

Or if consumers are not paying more, they're getting fewer government services as top-down rebates are funded through taxation or budget cuts.

That's not green progress, of any kind. Do you agree?


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