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Friday, January 28, 2011

Token levy is no financial levee for fraught climate future

UPDATE: Below is piece run by @ABCEnvironment drawing on my earlier posts about the Queensland floods and need for a national disaster fund in Australia (you can see it on ABC Environment at

The PM's new flood levy shows thinking which is short-term, cowardly and doesn't understand climate change.
IN THE MIDST of this month's ruinous and deadly floods in Queensland and other states too, I posed the question: If weather-related disasters are the new normal, how do we pay for rescue, recovery and rebuilding?
The question flows from the scientifically well-established proposition that more people and more property will be exposed to more severe natural disasters more frequently under the main climate change scenarios - and actual experience is bearing this out here in Australia.
Whether it's the recent floods, Victoria's terrible bushfires nearly two years ago, or the long drought just passed, the facts reflect the best science. The impact of nearly one degree Celcius of warming over the past century - with more to come - means that higher average temperatures can make already dangerous weather-related events even more extreme.
Yesterday, Australia's Prime Minister Julia Gillard came up with superficially the same answer to the 'how do we pay' question that I did - a natural disaster levy!
Unfortunately, PM Gillard's levy version is short term, politically cautious if not cowardly, and one-off trivial in the context of the forces at work in a climate change world. In fact, the Gillard Government's response has morphed into an economic adjustment strategy, more than a disaster recovery one per se, using the $1.8 billion in levy proceeds plus spending cuts to help dampen excessive growth in the economy, perhaps easing pressure for more politically unpalatable Reserve Bank interest rate rises.
My levy prescription, by contrast, is long term, politically confrontational and aimed right at the heart of the threat posed by human-induced global warming. Australia needs to get serious about planning for climate change adaptation, precisely because along with most of the world we are proving to be hopeless at timely mitigation.
A natural disaster levy should now be part of prudent national budgeting. Such disasters are economic mainstream, not 'oh, shit happens'. We can't rely on a cocktail of sporadic insurance cover, post-crisis charity (inspiring as it is to see people give their money and sweat to help others) and ad hoc and politically expedient levies to pay for them.
Up front, I hasten to add, I don't mind paying my five dollars or so a week for a year if it helps Queensland to recover faster. A Queenslander by birth, I take a certain perverse state of origin pride in my home state's capacity for spectacular weather-related disasters.
Nor do I particularly mind the Government's planned spending cuts, even though they fall mainly on climate change and environmental programs. By reports, the programs to be scrapped or deferred include the cash for clunkers scheme, the Green Car Innovation Fund, carbon capture flagship programs, the Global Carbon Capture and Storage Institute, the Green Start program, and the Solar Hot Water Rebate scheme.
Most of these programs represent fiddling at the green fringe at best, and at worst they further prop up the already overly subsidised coal industry, carbon polluter numero uno. If they fade away while the Government delivers a credible price on carbon by 2012, and hopefully a robust national energy efficiency scheme as well, then I reckon the trade off is fine.
Of course, while PM Gillard has a levy plan, now it all comes down to political numbers in a fragile minority government scenario. Already it's becoming clear that the Abbott Opposition will oppose pretty much anything the government proposes, the Greens will want business and especially big polluters to pay rather than the public, and the Independents - led on this topic by the eminently sensible Tony Windsor - will seek a longer term solution along the lines of a permanent national disaster fund.
So how can the government's levy plan rise above the inadequate, even tokenistic offering put up yesterday?
1. Make the burden of weather-related disasters falling on Australians through fire, floods, drought and more part of the official narrative in support of climate action. Even if this represents human-caused climate change influences overlaid on natural weather cycles, for example hotter average weather conditions on top of a normal drought cycle, the end result is more devastation. The same goes for more violent or rain-filled storms on top of a classic wet season. All of this gets much worse if cyclone or bushfire wind speeds increase, as is expected to be the case, making already lethal events even worse. Nobody should be shielded from this likelihood, least of all because climate change has become part of the nation's culture wars in recent years.
2. Elevate these disasters to be overtly part of the national economic discussion, rather than putting them in the 'shit happens' category, or believing that a blend of insurance, government aid and corporate and community charity will always pay the way.
3. Establish a national natural disaster cost index, including a segment specifically for weather-related events, so we can plan for the cost and compare outcomes year on year. Droughts, cyclones, bushfires, hail, floods and drought all go into the mix, as do rogue cold snaps, and away from the weather don't rule out earthquakes, tsunamis and the like.
4. Recognise that as a developed nation, Australia will always want to respond and recover from these natural disasters in a timely, compassionate and economically effective way. So that will mean a big budget because the days in which we could rely on volunteers to deal with every disaster will soon be behind us, if they aren't already, and even training and equipping volunteers doesn't come cheap.
5. Make the big question of where the money should come from integral to the climate action agenda, including the question of a price on carbon and the calculations of how high it should be and what it should pay for.
One source for the money seems obvious. With the mining industry having fought off a 'super profits' tax so viciously, and now having second thoughts about a more modest rent tax; with the fossil fuel sector having so effectively undermined a price on carbon, at least until now; with commodity prices still so high; with their own vital infrastructure and value chains so vulnerable to extreme weather events - isn't the answer clear? How about the miners and drillers pay! If not all, then a hefty share, and while they are sure to howl all over again, they can claim for support from the multi-billion dollar fund when disasters strike them too.
It's ironic that the PM's levy will be collected in connection with the Medicare levy. No one would suggest that health funding should be done on an ad hoc basis, when and if a new disease or rash of injuries arises. Disasters are now a regular part of the economy. Their type and seriousness varies, but then the stockmarket fluctuates, interest rates rise and fall, and unemployment can be extremely bad or wonderfully benign or anywhere in between.
If we want to regularise the reality of the climate change threat with Australians, or people anywhere, we need to move disasters from being bad stuff that just happens to some unfortunates to be part of the economic mainstream. That's how we get everyone engaged, isn't it?
Murray Hogarth is a sustainability commentator and adviser who tweets as @The_Wattwatcher and blogs

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