How to sell a carbon tax

Let’s admit it. One time or another, most of us have taken the easy way out. We’ve criticised instead of giving constructive criticism; we’ve focused on what can’t be done instead of what can.

When it comes to the carbon tax, my hands aren’t clean. I’ve been critical of the climate change mantra that claims putting a price on carbon in Australia will reduce global emissions.

However, putting my misgivings aside, if I look at the carbon tax as a communicator I’ve no doubt that it could more effectively be pitched to the Australian community. So I challenged myself to craft a communications strategy that would successfully sell such a tax.

And here it is. This strategy is an all-or-nothing approach. Each of its four components relies upon the other. It also relies upon the sincerity of our Prime Minister to be successful.

Step 1: Say sorry

There’s only one way for Julia Gillard to defuse the ongoing and escalating accusations of deceit. She must apologise, unreservedly and genuinely, for breaking the commitment she made before the last federal election.

Such apologies can be done badly, so the PM must study key examples to avoid making similar mistakes. Ms Gillard would do well to note how her predecessor mishandled an apology exactly 12 months ago by mouthing the right words, but in such a sing-song manner that any perception of empathy was shattered in the process.

Like Rudd, Gillard also seems to have been standing behind the door when empathy was handed out, so she will need to keep this in mind when delivering her mea culpa on the carbon tax.

Step 2: Be honest

Secondly, the Prime Minister must dispense with the pretence that Labor holds government in its own right. When apologising for the broken pre-election commitment, Gillard must remind voters that she was obliged to do so in order to form a minority government.

Ms Gillard must remind voters that it was their decision to give the Greens and independents the power to form government with one of the major parties. And she must remind voters that negotiation and ultimately concession are the price that Labor must pay every day to deliver as many of its elections commitments as possible to the nation.

In being straight with voters about the constraints they’ve imposed upon her, the Prime Minister would achieve two things. She’d earn respect for acknowledging this democratic decision. She’d also be telling those who voted in protest for the Greens last time that they should consider this outcome and vote more carefully next time.

Being honest in this way doesn’t necessarily give credibility to the Opposition’s claim that Bob Brown is the real Prime Minister. If delivered by Julia Gillard with honesty and authority, this message will demonstrate that she has the leadership capability to accommodate Green voters’ interests while still pursuing a broader Labor agenda for the benefit of the whole community.

Step 3: Put Australia in a positive light

Thirdly, the Prime Minister must focus and build upon Australia’s greenhouse positives, not the negatives.

Australians want to be told they’re winners, not losers, and preferably on the international stage if at all possible. We don’t like being scolded for emitting the highest amount of greenhouse gas emissions per person in the whole world. We don’t like being made to feel guilty about our quality of life. And we feel anxious, resentful and even angry about government actions that may threaten that lifestyle in any way.

Rather than tell Australians they need to take their greenhouse medicine and cop a little pain for the public gain, the Prime Minister should spruik how Aussie greenhouse technologies, services and know-how are smarter and more successful than our international competitors.

In this context the carbon tax can be pitched as the way for all Australians to help fund our smarter greenhouse actions; the way to pay for the expensive research, development and demonstration projects that are needed for Australian clean energy technologies to get the edge on their overseas competitors and be winners on the international stage.

Step 4: Make it real

And finally, Australians must be helped to make connections between their own everyday actions and greenhouse mitigation.

State governments did this successfully with their water restriction campaigns. By drawing a link between climate change, the drought and dwindling water resources, state governments gave their constituents a way to see the tangible benefits of their water parsimony; whether they changed their water consumption behaviour, paid to install water tanks, or let their turf die.

The altruistic “payback” for these actions was the daily progress reports on roadside electronic billboards showing the results of the previous day’s efforts in terms of water used, targets reached and dam levels achieved.

Australians were happy enough to comply with water restrictions because they felt they were doing their bit for the collective good, and in reality the required change in behaviour was not overly costly or inconvenient.

Similar initiatives are needed to sell the carbon tax. Daily electricity use numbers, targets and perhaps even $$ saved or exceeded could be shown on the same electronic roadside billboards that have become a familiar sight to commuters on their daily trek home.

Real-time feedback of this kind will remind Australians that they are doing their own bit for the planet, and help them to feel good about it.

These are the success factors for selling the carbon tax. Make an apology to reset the tempo of the debate. Treat Australian voters like adults and tell them the truth about the constraints of minority government. Tell us we’re winners in the greenhouse action game. And help us feel not only connected to that action, but also proud to be doing our bit.

Voters don’t care about political lies

The Coalition and conservative media might as well stop flogging the dead horse known as JuLIAR. They’re wasting their breath because the public just doesn’t care if a politician is accused of, or even found to be, lying.

These days, lack of truth is what voters expect from all politicians: there’s no political capital to be gained or lost from one MP pointing an outraged finger at another.

Politicians are, however, taking a big political risk if their behaviour suggests they can’t be trusted to do what’s right for the country.

The public’s inoculation against political dishonesty seems to have started in the Howard years.

While voters were considerably unhappy with Keating’s broken L-A-W promise on tax cuts in 1993, and sent him to the lowest ever approval rating for a modern Prime Minister, PJK was still able to drag that rating up enough to dispatch two Opposition Leaders during his term. It’s clear this breach of faith nevertheless contributed to the wave of anti-Keating sentiment that swept him from office in 1996.

During the Howard years, however, it’s as if voters became accustomed to, and then unfazed by, political deceit. John Howard first swore as Opposition Leader in 1995 that he would “never, ever” introduce a GST; then as Prime Minister he successfully took such a tax to the 1998 election. Some would say Howard was not actually “successful”, having only secured 49% of the vote, but I’d argue that his success was measured by the two election wins that followed the GST. Howard also backtracked on numerous commitments made during the 1998 election campaign, dismissing them as “non-core” promises.

Even more memorable are the claims made against the PM in 2004 that he lied about children being thrown overboard by boat-bourn asylum seekers in 2001.

Political observers were puzzled at the time that this revelation did not cause voters to desert the Coalition. Newspoll’s tracking of how voters perceived Howard’s trustworthiness found that his rating had dipped only slightly from 60% in 1995 to 57% at the height of the furore.

Howard’s trustworthiness rating dropped further, to 51% at the time of his election win over Opposition Leader Mark Latham, whose own trustworthiness rating at the time was 61%.

Almost counter-intuitively, Howard fought that election on a platform of trust. He announced the election with a direct call to voter values: “Who do you trust to keep the economy strong and protect family living standards?” “Who do you trust to keep interest rates low? Who do you trust to lead the fight on Australia’s behalf against international terrorism?”

The ALP clearly thought they had an edge over the PM in the trustworthiness stakes. Latham’s response was to claim: “We’ve had too much dishonesty from the Howard Government.” “The election is about trust. The Government has been dishonest for too long.”

Unfortunately for Latham, he and the ALP did not differentiate between a voter’s trust in a politician to tell the truth and their faith in that politician to run the government responsibly.

Politicians as a group haven’t been trusted by voters for a very long time. The Roy Morgan “Image of Professions Survey”, conducted over the past 16 years, ranks state and federal politicians 22nd and 23rd out of 30 professions when it comes to perceived honesty and ethical standards. (Union leaders rank 24th and newspaper journalists 27th.)

An interesting print article on honesty in politics and the children overboard issue in 2004 quotes a pollster explaining the contrast between voters believing politicians and actually trusting them to do their job: “We have total faith in almost nobody, but we put conditional trust in each of our institutions to perform their function. We trust the bank enough to move our money from one account to another; we trust the politicians enough to run the country. It’s only when we think they are not taking any notice of us at all that we rebel and invent something like One Nation to get their attention. We basically trust them just enough.”

This argument applies equally today and goes some way to explaining the popularity of the Greens.

The article concludes by suggesting that “while leaders deliver on our core demands, it seems that we are prepared to live with their dishonesty ….. [yesterday’s poll] found 60% believed Howard had deliberately lied over children overboard, [but] only half that level – 29% – thought he should lose his job over it.”

This is why PM Gillard can privately dismiss current accusations of deception over the carbon tax. As long as she can convince Australian voters that she is running the government responsibly and making the right decisions on behalf of the whole community, as opposed to conceding to the whims of a few (that is, Green voters), she is inoculated against this attack.

This post also appeared at The Drum / Unleashed

Symbolism or substance: Will a decarbonised Australian economy fix climate change?

As an old campaigner, I implicitly understand the need to condense complex matters into sound bites or slogans.  The problem with stripping the details out of an issue and reducing it to a memorable phrase is that people tend to defer to their own interpretation of what that phrase actually means.

This can be dangerous territory for a politician or party if the sound bite or slogan implies an undertaking.  While the nature of the undertaking may be clear in the mind of the spruiker, it might have an entirely different meaning to the audience.

Rudd’s lesson

Kevin Rudd learned this lesson the hard way.  During the 2007 federal election campaign, Rudd differentiated himself from John Howard on two points: he would scrap Work Choices and ratify Kyoto.  Neither Rudd nor the ALP made any effort to explain what ratification of the Kyoto protocol meant in practical terms.  They were content with the electorate inferring from this undertaking that Australia’s ratification would fix climate change.

But of course, it did not.  In reality, ratification of Kyoto granted access to a number of climate mitigation activities including a future global emissions trading scheme amongst parties to the protocol and emission credits for businesses investing in greenhouse gas reducing projects in developing countries.

After formally ratifying the Kyoto protocol, Rudd subtly shifted his language to the need for Australia to adopt an emissions trading scheme to fix climate change.  Having trusted the Prime Minister on ratification, and feeling no adverse effects, Australians were comfortable in the belief that adopting an ETS would be equally painless.

Green words not green deeds

It is important to understand that while people say they want environmental action, and that they are prepared to pay for it, their actions disprove their words.  Australian green energy schemes continue to languish in the single-digit percentages because people do not want to pay a premium for a product that has no discernable difference.  Surveys of grocery shoppers have found that the actual contents of their trolleys undermine their previously- stated preference for green products.

Why penalise Australians for their quality of life?

Why penalise Australians for their quality of life?


In reality, most people don’t want to pay more to be environmentally friendly – unless the expense can be expressed in a way that can be seen such as having a water tank or driving a hybrid car or carrying a green canvas shopping bag.

This is where Rudd came unstuck.

The point of an ETS is to wean an economy off fossil fuels.  This is done by putting a price on carbon so that fossil fuel based products become more expensive and the renewable based products start to look competitive in comparison.  That’s the economic theory.

Problems with decarbonising Australia’s economy

There are several problems with this theory for Australia.  Firstly, 80% of Australia’s electricity is generated from coal and we have coal reserves that could last for several hundred years more.   Our plentiful coal has allowed electricity prices to remain consistently low, and as a result we currently have the third lowest electricity prices in the world.

Not only have these low electricity prices brought energy intensive industries to Australia, they have contributed directly to the Australian community’s quality of life.  Around 11.5% of Australia’s greenhouse emissions come from households and another 14% from transport (most of which is cars, trucks and planes).  An ETS would place cost pressure on the households to move them away from the activities and products that use fossil fuels.

Once voters began to realise this, they felt conned and unhappy.  This unhappiness has clearly been picked up by party polling, evidenced by both major parties moving to distance themselves from an ETS before the impending election.

While the ETS is now on the backburner, we will nevertheless continue to hear the latest slogan promoting the need to decarbonise the Australian economy if we are to fix climate change.

As point of substance, this contention is patently absurd.  Australia contributes less than 2% of the world’s greenhouse gas emissions.  No amount of reduction in Australia will make a material difference to the phenomenon.  Even if every Australian house had solar panels, and every family drove a hybrid car and grew their own vegetables, there would hardly be a perceptible dip in global emissions.

So, as a point of symbolism, should Australia decarbonise its economy to show leadership and coax other developed nations into doing their fare share to mitigate the problem that they originally created?

If leadership leading to deep cuts in global emissions is the real objective of Australian action on climate change, then penalising Australians for their quality of life will not achieve that objective.

An unconventional solution

There is no way to stop the developing world from using coal in the foreseeable future.  These nations are rightly focused on bringing their people out of poverty and will use the most reliable, affordable and safe means of electricity generation available to them.

The International Energy Agency has projected that from the year 2000 to 2030 around $16 trillion dollars will be spent on developing and providing energy to the global population.  Over that same period, the number of people with no access at all to a reliable/commercial supply of energy will reduce from two billion to one billion.  Those of us sitting in our air-conditioned homes and offices need to bear this in mind when we nod sagely about the need to decarbonise the economy.  In 2030 there will still be people on this planet burning cow dung to heat their homes and cook their dinner.

Where does that leave Australia?  I believe we can take credible climate action that has both substance and symbolism.  Firstly we need to take the economists out of the equation – they have no interest in the human cost of their proposals.  Stop focusing on the business case too – there are too many vested business interests on either side of the climate change debate for the market to sort this out.

My solution lets all Australians feel involved, with minimal financial pain, and with greenhouse gas reductions being deployed where they are needed most.

Firstly, impose a greenhouse levy on all taxpayers in the same manner as the Medicare levy, which currently raises around $8 billion each year.  Attaching the levy to income ensures that those who earn more will pay more, and those who are disadvantaged or unemployed will not pay at all.

Secondly, use the funds to develop and deploy clean energy projects in the developed world – particularly those countries that have the potential to contribute the most greenhouse gas emissions in future.  In doing so, the Australian people would be getting more global greenhouse action for their dollar than they could ever hope to achieve at home.

Does this proposal make economic sense? No.  Does it make business sense? No.  Does it make sense in terms of Australia being a leader and making deep cuts in greenhouse emissions? Yes.

Maybe its time we changed the way we looked at climate change in Australia, and even the world.

Who’s the demon?

At the risk of being called naïve or an apologist, I feel compelled to challenge the demonisation of big business.

While it is something that has been troubling me for a while, my concerns have become crystalised by the anti-mining mutterings of my esteemed colleagues on Twitter.

In recent days, the more we non-economists hear about the misnamed Resource Super Profit Tax, the more sensible it seems.  But it has taken serious journalists such as Peter Martin and George Megalogenis to take the time to translate this arcane but practical arrangement into plain English.

We should not have been subjected to the shrill objections and counter-claims of the mining industry and Government.  Any government worth its salt on the issues management front could have turned this resource and risk sharing arrangement into a good news story by bringing the mining industry into the tent and getting them on side before the RSPT announcement was made.

Is this me being naïve?  Or did the Government want the mining industry to be seen to be taking a hit swiftly after it dodged an earlier bullet with the abandonment of the Carbon Pollution Reduction Scheme?

Did the Government consciously demonise the mining industry in an attempt to regain a few brownie points from the electorate?

Perhaps the answer can be found in the title for the new scheme.  The moniker given to the Resource Super Profit Tax smacks of the same hyperbole applied to the Carbon Pollution Reduction Scheme.   The RSPT is no more a real tax than CO2 is real pollution.  But these labels provide a mechanism for the government to simultaneously suggest there is a serious problem and that it is addressing this problem with a new acronym, I mean, program.

Aside from this, is the demonisation of the Australian mining industry justified?

Yes there have been sins in the past.  And there are still some out-riders who think they can still get away with it dodgy practices.  But it is no more logical to burden all miners with the sins of the few, than it is to do the same with teachers, car drivers, or internet users.

Mining companies work on 20 and 30 year timeframes.  They understand better than most of us the bounty and the limitations of the earth.  Even so, it took them a while to realise that the natural environment is not limitless in its capacity to rebound from the stresses of mineral extraction.  It took them even longer to understand how their operations impact on people and societies.  But they did come to understand these factors and they took action to change.

Around 10 years ago, led by Australian mining company CEOs, the global industry took the unprecedented step of commissioning an international NGO called the International Institute for Environment and Development (www.iied.org) to run the world’s biggest community attitudes survey.  The survey was to find out what communities, governments, environmentalists and other activists in both the developing and developed worlds thought about the mining industry and what they wanted to change about how the industry went about its business.

Some mining companies walked away from this process because they found it too confronting.  To my knowledge, none of those companies operate or have a presence in Australia.  Some NGOs walked away too because they thought it was a greenwashing exercise.  But after two years of the community talking and the mining industry listening, some real outcomes emerged.  Perhaps these were less ambitious than some would have liked.  But they were a start.  A new mining entity was established at the global level to continue the discussion with NGOs and to deliver the undertakings.

My point is that mining companies know better than most that they have to be “good corporate citizens” in order to keep their social license to operate.

It is these companies who have built roads and communities alongside their operations in rural and remote Australia.  They have built infrastructure for water and electricity generation.  They have education and employment programs for their local people.  They have invested in these communities with their shareholders’ funds because governments would not.  And as a result they have a relationship with their communities that politicians and other companies could only ever dream of.

While some critics of mining are prepared to acknowledge this investment, they call it the resource curse – communities and economies made dependent on mining revenue that are left stranded when the operation ceases.  This may well occur if a mine is closed before its time due to emergency or insolvency.  But most major operations include the cost of withdrawal from the community in their initial project costings.  This withdrawal includes building capacity within the community to ensure that it can continue to thrive once the mining project has concluded.  If you want a real example of that strategy, then look no further than the thriving ex-mining town of Newcastle.

I’ll have other things to say about the anti-corporate, anti-capitalist bandwagon.  But for today, I’ll finish by saying this: when a politician points at someone and says they are bad and need to be dealt with, first ask yourself why the politician wants you to believe him …….

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