Taxed to the max on emissions
Excluding and misrepresenting unfavourable data does not provide a credible analysis into Australia's extremely expensive carbon tax.
Yesterday the Climate Institute released its Global Climate Leadership Review that significantly bucked other analyses and concluded Australia's carbon tax of $23 a tonne of greenhouse gases was modest. The report says Sweden has a $130 equivalent carbon price. Switzerland is up to $60.
In response the report suggests, as many of the institute's reports do, that Australia is once again lagging behind the rest of the world in combating climate change.
The problem with Australia's $23 carbon tax isn't just that it is internationally high, it is also applied broadly.
That isn't what is happening in other countries.
As the Climate Institute's report notes in small print, the Swedish carbon price is "levied primarily on oil, coal, natural gas and petrol".
Switzerland "covers coal, oil and natural gas". The report is littered with similar caveats for other countries.
That's why the Productivity Commission highlighted in its Carbon Emission Policies in Key Economies report last May that "most countries have adopted sector-specific policies".
And "no country currently imposes an economy-wide tax on greenhouse gas emissions or has in place an economy-wide ETS".
We know from the government's national greenhouse and energy reporting scheme data that lists our highest emitting companies that the tax will include energy companies.
But it will also include food and grocery manufacturers, alcohol companies and healthcare providers, to name a few.
The Gillard government's decision to exclude firms that significantly contribute to the production of petrol ensures Australia's scheme falls short of being completely economy-wide.
But it's certainly the closest national scheme to being so.
Similarly, the report doesn't include data from other large emitters. Carbon price data from key competitor countries such as Chile and China are excluded. So is the carbon price from the carbon-backsliding Canadians.
And the carbon price for the US is misrepresented by data from California alone.
In making the claim that Australia is "beginning a phase of catch-up" through its carbon tax the Climate Institute is comparing apples with bananas, oranges, cucumbers and pumpkins.
And it's not the first time.
In August last year documents released under Freedom of Information showed a government-funded, Climate Institute-commissioned report used non-comparable methodology. As a result, China's carbon price was reported to be $8.08 a tonne to Australia's $2.34.
Yet the documents showed the Climate Change Department questioned the methodology and concluded if it were consistent that China's carbon price would be only $1.78 a tonne.
Because cutting greenhouse gases is a global challenge, what is happening internationally matters. The Climate Institute's report also provides a rosy analysis that "the outcomes of the Durban climate change meeting at the end of 2011 represented real progress".
It's true a timetable for the conclusion of negotiations of a new agreement that includes all major emitters was set for 2015 for an operational agreement by 2020.
But most of the detail that led to the spectacular implosion for the Copenhagen deadline remains unresolved. Whether these talks succeed or fail will ultimately decide whether the global economy is carbon-constrained. Without constraint the incentive to cut emissions won't exist.
Accepting constraint as an article of faith may help advocates argue Australia isn't prepared and is undermining its future prosperity, but it misrepresents the nature of the challenge.
There's no dispute in a carbon-constrained global economy it would be extremely expensive to cut emissions in Australia.
We are an economy built off the back of cheap fossil fuels. And fossil fuels dominate Australia's emissions profile. That makes the cost of switching to renewable energy substantially greater than in many other countries.
As the Productivity Commission's report found, we already have substantial subsidies for renewable electricity and it isn't economically viable.
The carbon tax necessary to shift from coal to solar power would be about $250 a tonne. And it wouldn't even be baseload.
It's precisely for that reason that the Gillard government is right to allow for up to half of all emissions reduction permits to be purchased overseas into its trading scheme beginning in 2015. Arguably, they should allow all to be purchased abroad. With comprehensive international emissions trading, emissions reduction would almost always take place in Australia last. This is why, even with an honest and comparable carbon price analysis, Australia imposing one of the world's highest and broadest carbon taxes will be so economically damaging.