Right, so I have heard a lot of the political hubbub following the announcement, and I have heard the opposition’s position on it, and I have even done some informal polling of my own to canvas views, so I had better make a comment on the carbon tax. It’s my preferred option, if you have been checking in regularly, and if it goes through, also possibly the first time I have ever predicted the future where it wasn’t something bad.

The Coalition’s position, put forward formally by Malcolm Turnbull (who has just got to be loving life having to carry this bag of shit), is that their proposed direct action proposal will be better, but that he personally favours the ETS. So, basically, they got nothing. And all they want to do is scream about the election lie of not having a carbon tax prior to the last election. A furphy.

Here’s the facts. Three blockages by the Coalition with the assistance of the Greens in the last parliament meant that labour wasn’t going to get its ETS up without a pound of flesh to the Greens, and that cost is a fixed price sooner, hence the carbon tax. Julia Gillard made the promise of no carbon tax prior to the last election, based on a Labor government ruling in its own right, not as a minority government. So, while we all like to call all politicians liars, the truth is that promise was null and void when she didn’t win the election outright.

So take that as a lesson Coalition (including you Malcolm): If you go too far to the right (climate change denial) and block something by any means (roll your leader and renege on a deal), then you sometimes end up getting something you like even less when your previous conspirator joins your enemy.

My position on a carbon tax has been stated before. To summarise, its far less elegant a solution that an ETS, but also more transparent and less easy to corrupt. The Coalition’s only substantive complaint so far has been that the proposed carbon tax is low on detail, so here are some more boring facts about the carbon tax, functionally.

It will have a short-term fixed price to allow the parties who believe in climate change [Multi-Party Climate Change Committee (MCCC)] to defer a final decision on a 2020 greenhouse gas (GHG) emissions reduction target for three to five years, in which time they hope to have another international agreement on targets to replace Kyoto, which expires in 2012.

The price will remain fixed for three-to-five years until, and unless, a review recommends moving to an ETS. Once the shift to an ETS occurs, the market will set the price of a ton of CO2. At that time, Australia’s emissions will be capped and controlled by Australia according to the international agreement, through the use of emissions trading in Australia (which will undoubtedly look a lot like the CPRS) or other model like that passed in California late last year, since we failed to get ours up first here in Australia. Barring the achievement of an international agreement, Australia will most likely try to pursue a regional agreement, linked to others already being formed, or start our own closer to home.

Under a carbon tax, business would have some certainty but no comfort. They will not know a limit on how much they can emit, but they will know the exact cost of their emissions for the next 3-5 years.

More importantly, the fixed price carbon tax will give certainty to energy consumers and renewable energy investors, about the exact cost of carbon pollution. Electricity providers, fuel providers and anyone else included in the program will undoubtedly pass on their costs to users, so we can actually see if our electricity bill is going to go up $300 a year.

Then, based on what industries actually do with the cost applied to them, we can then start arguing over what government can do with the actual of tax it will have raised each year, that should amount to about $5 billion, assuming a price of $15/ton CO2e and including the emissions from energy, industrial processes and waste, but excluding land clearing and agriculture (for now).

Depending on what the company (or people) are willing to do to change their emissions profile, we can discuss how are we going to assist losers (coal industry) in moving to the clean energy economy, while avoiding getting the government involved in picking winners and losers and letting market forces set the price over time.

Would I be interested in using some of the tax raised to provide low interest loans to those in the coal industry convert over to gas? Probably. Would I be interested in doing the same for companies that want to invest capital in large scale renewables? Possibly. What about supporting Bluescope Steel in making green steel here, or also applying a carbon tax to competing imports? I’d consider it. But would I be interested in direct funding of projects to capture CO2 from burning coal and see if we can sequester it in the ground or other Rube Goldberg device? No fucking way. But hey, even if there aren’t that many great ideas to assist in the shift to a greener economy, we could just return the tax to the 9 million households in Australia to the tune of $555 per household per year to help them afford the higher costs that will be passed on to them. Households that use more energy (or are wasteful) might not get their costs all covered, but those that are more efficient could be net winners after the tax. The bottom line, let’s not be too scared by the economic horror stories that will be peddled out by the same people who don’t believe climate change is happening.

You can also start to look at the upside. The Climate Institute report released this week also shows that, “Australia has largely untapped energy resources in geothermal, large scale solar, bio-energy, hydro, wind and natural gas.” Work in these areas will create these new employment opportunities out to 2030:

NSW: Close to 7,000 new power sector jobs
Queensland: Close to 6,300 new power sector jobs
Victoria: Over 6,800 new power sector jobs
South Australia: Close to 2,700 new power sector jobs
Western Australia: Over 3,500 new power sector jobs

Now, lets see how that compares to my previous analysis of jobs that would be lost working in the coal industry if we got off burning the magic dirt. Well, not too bad, actually, considering my prediction was based on a 97.5% reduction in coal burning, whereas the Climate Institute only predicted a clean energy usage target of 43%. Anyway, they predicted a growth of 26,100 jobs nationally (many in regional areas) which isn’t that far off half of my prediction (23,500) of the jobs lost by eliminating all burning of coal for electricity.

So, net jobs is about a wash, and the jobs gained are jobs just as good as those they replace, not low paid crappy service work. And as I have said before, don’t try to scare me with job losses. We have just gone through the second worst recession in history with massive job losses, and the world did not collapse. If dirty jobs need to be lost, they should be, even if they aren’t immediately replaced.