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Submission to Australian Senate Select Committee on Climate Policy

To Senators on the Senate Select Committee on Climate Policy,


"The first man, who after enclosing a piece of ground, took it into his head to say, "This is mine" and found people simple enough to believe him, was the true founder of Civil Society. How many crimes, how many wars, how many misfortunes and horrors would that man have saved the human species, who pulling up the stakes or filling up the ditches, should have cried to his fellow! Be sure not to listen to the imposter; you are lost if you forget that the fruits of the earth belong equitably to us all, and the earth itself to nobody."

Jean Jacques Rousseau, Essay on the Origin of Inequality Among Men, 1755

"Men did not make the earth, and though he had a natural right to occupy it, he had no right to locate as his property in perpetuity any part of it; neither did the Creator of the earth open a land-office, from whence the first title-deeds should issue."

Thomas Paine, Agrarian Justice, 1797

It is a trivial reality that nature existed prior to our species and the current system of economic ownership of the factors of production. But when these means of ownership do not accord appropriately with the physical laws of nature, both natural and social dangers arise.

Our economic system allows for the private ownership of natural resources in perpetuity rather than public ownership with the derivation of site rental values as a source of public income. As a result, natural resources often suffer from a 'tragedy of the commons' effect.

Whereas economists have almost universally argued against the taxation of capital and labour in favour of economic land, there is another side to this equation: that damage to the environment should also attract a economic penalty equal to the long-run costs of the activity.


Emissions trading is a highly effectively economic tool that can be used to capture the principle explained above; by charging a penalty for damage to the environment, an incentive is created to minimise damage nature. This should be equal to long-run average costs.

As it stands however, the Carbon Pollution Reduction Scheme (CPRS) proposed by the Government is a badly designed scheme. It the target levels within the scheme are far below long-run average costs. The compensation to polluters for the scheme being introduced is far too generous.

The CPRS target is to reduce Australia’s carbon emissions to 5% below 2000 levels by 2020. This is far below the required levels to avoid significant climate damage and associated costs. The Garnaut report ecommended that Australia should seek international agreement for a carbon dioxide equivalent concentrations of 450 ppm. This would commit Australia to reductions of 25% on 2000 levels by 2020, and 90% by 2050.

Even if there is no international agreement on this targets, Australia should continue with them and display leadership by example. This may come with some economic cost, but, as a natural effect, the costs will be borne anyway. Far better that the Australian environment retain its value, rather than competing with others for a degree of damage.

Further, the CPRS will provide Australia’s worst polluters with billions of dollars of compensation in cash and free permits to pollute. By doing so, the CPRS will protect the profits of Australia's worst climate offenders at the expense of clean industries. It does not recognise or reward the efforts of individual citizens and residents who have engaged in voluntary reductions.