If climate activists had spent the past 10 years acting instead of wasting time at talkfests such as the one at Copenhagen, we would already have a price signal on greenhouse gas emissions.
It is an indication of the sorry state of community groups that when faced with a problem, they spend millions of dollars whingeing and asking other people to do something. This is especially true when it comes to climate campaigners. While this group of young ideologues revel in their self-appointed moral superiority, they have so far achieved very little.
Concern about anthropogenic global warming is appropriate. The Earth did warm up in the late 20th century, and the United Nations thinks greenhouse gas emissions are probably a major cause. Understandably, many people want to reduce greenhouse emissions.
Unfortunately, when you combine a worthy goal with politicians, you get a mess. So far, the Federal Government has spent billions of taxpayer dollars picking winners, introduced inefficient regulations, and attempted to introduce a disastrous and dysfunctional emissions trading system with no benefit and many costs. Some people (rightly) point out that it would be better to replace all of that with a simple carbon tax. But there is another solution that seems to have been totally ignored.
Instead of whinging and waiting for politicians to become benevolent, people who are worried about anthropogenic global warming can take immediate action.
To be fair, some groups offer people the opportunity to offset emissions by planting trees or capturing methane from landfill. But the only long-term fix is better technology, and so community groups should be looking at ways to encourage investment in alternative energy technology.
Effective action requires money. Green groups raise funds, but these are often wasted on political lobbying rather than direct action, and so community involvement is replaced by rent-seeking. To engage the community, climate activists should offer the chance to contribute to a climate-change fighting fund which would be dedicated to action and not politics.
One option for funds would be workplace giving, where workers could allow 0.5 per cent (or more) to be deducted from their income and go directly to the community fund as a voluntary donation. Even if only one-third of Australians agreed to give the minimum, they would easily raise more than $1 billion.
It is easy to imagine entire workplaces getting together and jointly agreeing to join the scheme. Businesses would also be keen to contribute to show their green credentials, and rich philanthropists would add to the fund. Green groups already raise millions of dollars every year; they could contribute some of that to the climate fund instead of political lobbying. Instead of flying to Copenhagen to report on failure, keen activists could arrange fund-raising to contribute. Political whinging is popular these days, but civil society has always been more effective.
The climate fighting fund could then commit to buying low-emission energy from alternative energy producers and selling that energy into the power grid at the going market price. For example, if alternative energy was twice the price of coal energy, then the climate fighting fund could buy $2 billion of alternative energy and sell that into the power grid for $1 billion, using the donations to pay the difference.
The effect would be a price signal with the same effect as a carbon tax or trading system but without the cost to the economy. The immediate effect would be an increase in alternative energy and a reduction in coal-based energy. However, the main benefit comes from encouraging the market for alternative energy.
With a guaranteed buyer for $2 billion worth of alternative energy, businesses will compete to find the cheapest low-emission technologies. Instead of the Government picking winners (which they are notoriously bad at doing) or forcing up energy prices through blunt regulations, business decisions would be made by market-savvy investors who have a strong incentive to pursue the least-cost options as fast as possible and make the most objective assessments of future viability.
As the fighting fund would be entirely voluntary, there is no need for lobbying, legislation or international agreements. We could start immediately. We could have started 10 years ago.
The Government cannot solve all our problems. Indeed, government action has a track record of making bad situations worse. In contrast, a voluntary climate fighting fund can be started immediately without a drawn-out political fight, without all the political compromises, and without the costs associated with government policy. If the Government then later wants to add to the scheme, it could offer matching funding. But a voluntary fund doesn't need to wait for government help or approval. All it needs is a group of climate activists who want to act instead of just talk.
John Humphreys is a Research Fellow at The Centre for Independent Studies.
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