The Carbon Tax: A Victory for Future Generations?

[Rishi Gulati lectures on Public International Law at the University of New South Wales in Australia.]

At 9.24am on 12 October 2011, surrounded by chants of “democracy is dead”, a suite of 19 bills (the Clean Energy Bills or the Carbon Tax Bills) were passed in the Lower House of the Australian Parliament. It must be borne in mind that those 19 bills won’t become law until and unless the Senate gives them the tick of approval. Given that the Greens hold the balance of power in the Senate, it can be assumed that the Senate will not be an obstacle for those laws to pass. So, unless there is a change in Government, by July 2012, Australia will have a Carbon Tax. The Australian Minister for Climate Change and Energy Efficiency, Greg Combet said that the Carbon Tax represents “one of the most important environmental and economic reforms in this nation’s history.” Following the passage of the Bills, the Prime Minister said “Today this House of Representatives moved from words to deeds. It has moved from what has sometimes been a rancorous debate to action. This House of Representatives today, this parliament today, has seized the future.”

The central facet of the CTBs involves the introduction of a carbon price to the Australian economy. Pursuant to the scheme, the largest polluters will be required to purchase carbon units for each ton of carbon pollution emitted by them if it falls within the scope of the scheme. Consequently, it is expected that there will exist a potent incentive to cut carbon pollution. Fundamentally, there is a simple rationale as to why the Carbon Tax is likely to lead to a cleaner future. In the words of Prentice MP, who opposed the measures, “taxes affect prices, and prices change behavior”.

Some climate skeptics effectively say that there is nothing wrong with our behavior as humans have not caused an increase in temperatures. That is most certainly an untenable position. Let’s just be reasonable and listen to people who have comprehensively considered these issues. In 1987, the Brundtland Commission said that due to the manner in which humans have unashamedly, without regard for the interests of future generations exploited the environment, the relationship between the human world and the planet that sustains it has undergone a profound transformation. It was said that at the start of the twentieth century, “neither human numbers nor technology had the power radically to alter planetary systems.” However, due to our modern practices, “not only do vastly increased human numbers and their activities have that power, but major, unintended changes are occurring in the atmosphere, in soils, in waters, among plants and animals, and in the relationships among all of these”. Undoubtedly, we have poisoned the Earth. Unless we dramatically change our patterns of behaviour, future generations will bear the brunt of our present day actions.

It is our undeniable moral duty to safe-guard the interests of children and future generations. They cannot speak for themselves, and thus the present generations act as agents as well as trustees for them. We therefore have an equitable duty to preserve the resources of the Planet for the generations that are yet to follow. According to the OECD, the concept of “Intergenerational equity refers to fairness in the intertemporal distribution of the endowment with natural assets or of the rights to their exploitation.” The concept can be traced back to the Brundtland Commission’s view that the current generation may not consume so many resources and cause such damage to the environment that “the ability of future generations to meet their own needs’ is compromised”. The international instruments where such a duty is imposed are too numerous to mention. However one prominent example is The Rio Declaration on the Environment and Development of 1992 that says that the right to development “must be fulfilled so as to equitably meet development and environmental needs of present and future generations.”

It is that duty that we owe towards future generations that has given the proponents of the Carbon Tax a potent moral basis to argue for it. Peter Garret said “This policy is not about short-term political point scoring or an election; it is about acting for future generations. If we fail to dare, if we do not try, the next generation will harvest the fruit of our indifference; a world we did not want—a world we did not choose—but a world we could have made better”. In the same vein, the Treasurer, Wayne Swan said: “Are we going to face up to the climate science and do something about carbon pollution? Are we going to face up to the fact that we should not leave for our children and our grandchildren greater costs and the heavy burden of carbon pollution? And are we going to show the Australian people and subsequent generations that we have the guts to face up to the tough economic reforms that will deliver prosperity for future generations?”

The opponents of the Carbon Tax amongst other things, also refer to the interests of the future generations in making their cases. For example, Mr Truss, the Leader of The Nationals said that “This is a tax that will hurt this country and this day will be a day of infamy in the minds of future generations of Australians.” It was said that “it will only take one month of Australia’s carbon tax to collect more money than the Americans have collected from their carbon taxation since it began several years ago…we are implementing the world’s harshest carbon tax. The Europeans are currently collecting, from their 30- country scheme referred to by the Assistant Treasurer, about $1 per person per year from the people of Europe. Our tax collects $400 per person per year right at the outset. This is a haunting prospect for Australian families…The Gillard government intends to consign future generations of Australians to massive cost hikes in perpetuity.”

The opponents of the Carbon Tax seem to focus more on the economics as opposed to environmental factors. Without passing any comment on the economic advantages or disadvantages of the Carbon Tax per se, if there is no environment there will be no economy. So, if there ever was a hierarchy of priorities, a cost to us today is worth paying because we must do everything in our power to provide the best possible chances for our children to thrive.

On another view, not only we possess a duty to act in the best interest of future generations, the future generations actually possess enforceable legal rights. No one can deny that at the least,
future generations possess a moral claim to live and exist. The claim to exist and live as the most fundamental natural law based claim, and the claims of future generations to inherit an environment fit for human survival can arguably be classified as a legal right that finds its basis in natural law. There is a precise content to that legal right. Scholars such as Anthony D’Amato have argued that future generations have the right to inherit an environment no worse than the one we enjoy. Professor Weiss has said that future generations do have the right to be assured that we will not pollute ground water, extinguish habitats and species or change the world’s climate dramatically unless there are extremely compelling reasons to do so, being reasons that go beyond mere profitability.

In the large scheme of things, if you were not born yet, you did not have a voice, and you were relying on the living generations to ensure that your legal right to live in dignity when you arrive on Earth is not breached, then would you be happy that the Carbon Tax is about to become law? There is only one answer to that question. And that is Yes. It is common sense that if carbon based material becomes expensive, then there will be more incentive to produce cleaner energy. It is however too early to determine the extent to which the Carbon Tax is going to be a success. But it is a start, and it gives hope, and that hope is based upon a logical interpretation of how taxes can change behaviour, a behaviour that we must change, and change now.