ETS voted down in the senate for a second time

The Federal Government’s proposed Emissions Trading Scheme has been just been voted down in the Senate for a second time. After the tumultuous political events of the last week, the new look opposition lead by Tony Abbot has blocked the scheme, which would have established a cap on Australia’s greenhouse gas emissions and placed a price on carbon.

The failure to pass an Emissions Trading Scheme slows down Australia’s adaptation to climate change and ability to move towards a clean economy. The continued conflict on the issue of climate change in parliament also sends the wrong signals to Australians who are trying to reduce their carbon footprint through means such as installing solar panels.

However, the latest action is almost certainly just a further delay and not the death of an Emissions Trading Scheme for Australia. The opposition’s current position on emissions trading is at its heart about their internal politics, not practical decisions for the country. With overwhelming public support for strong action on climate change sooner rather then later the opposition will have to change their stance or the public will make the change for them.

An Emissions Trading Scheme is the essential mechanism to reduce Australia’s greenhouse gas emissions. You may have heard that it’s just a great big tax – this is in essence true and the reason why it is so effective. The best way to discourage a damaging behaviour is to tax it. With a tax on carbon the price of “brown” energy will go up and the cost of green renewable energy such as solar will in comparison go down. So people will be able to make the rational choice to do beneficial things like install solar panels. The tax on brown energy imposed by emissions trading is not just a meaningless, arbitrary tax though. It reflects the reality that pollution actually has a cost, but right now the polluters don’t have to pay that price, and so have no reason or incentive to stop doing it. As a result brown energy is artificially cheap and this mispricing comes in the way of people making beneficial decisions to go green.

Rest assured though, an Emissions Trading Scheme will happen for Australia. It’s a matter of when, not if. So your decision to go solar will be paying off even more in the future then it does now.

Kobad Bhavnagri
Solar Energy Consultant
Solar Choice Pty Ltd

© 2010 Solar Choice Pty Ltd