Sustainability is Impossible without a Carbon Tax
Posted by David Burns | comments 22 Comments | agree_icon Agree (4) | disagree_icon Disgree (6)
Sustainability is Impossible without a Carbon Tax

Business understands the huge efforts required to achieve sustainability. If we trust the science, accept that climate change is real, and listen to the majority of economists that say that a carbon tax leading into an Emissions Trading Scheme (ETS) is the cheapest way to act, then...


The only remaining decision to make is when to Act. Since it is well understood that delaying ACTION shall cost more in the future, then...


1. Implementing a carbon tax now will stimulate investment in clean technology and alter spending patterns that reduce emissions and eliminate waste as our population trends upward. According to Yale University Professor & Industrial Ecologist, Thomas Graedel:


Environmental Footprint = Population x (GDP/Person) x (Environmental Impact/ Unit of GDP)

If we Assume -
Population will increase 1.5 times in next 50 years (from 6.8 billion to 9.0 billion).
Affluence will increase (ie. GDP/ Person) by 2-3 times in next 50 years.
Environmental Impact not allowed to be degraded any further.
Then technology is the only remaining variable which can provide the required 60-80% reduction in environmental impact per unit of economic activity (Unit of GDP), where Efficiency, Renewables, Factor-10 Engineering, Green Chemistry, & Closed-Loop Recycling offer the best routes to this solution.

Alternatively, Australia could slow future population levels, with less immediate reliance on technology as in the above Master Equation.

Nevertheless, the basic FACTS are -

2. The more people, the less we can take. With superior design and technology, the less we need. It needs to be noted however, that we are currently consuming 1,000,000 years of stored carbon every year which is unsustainable!

3. While the efforts of individuals are important, the massive reductions in emissions needed can only be achieved by business and industry employing clean technology using design that eliminates pollution from the ‘end-of-pipe' model that is currently ubiquitous. Simply planting more trees, adding more carbon to the soil, and adding additional solar panels to roof tops will not be enough to reach the necessary targets that scientists tell us are needed.

4. The reason why a carbon tax is better than direct action is because carbon can be used as a single economic lever capable of bundling all environmental and social impacts into one reform measure for the economy, allowing business capital to be directed towards clean technology for ever. The direct action funding policy stops at 2020 and does not create any form of long lasting competitive market mechanism which is self-sustaining.

5. An appropriate technology target for Australia to aspire towards by 2050 is one advocated by best selling author, Paul Hawken, who sees an economy that mimics nature where primary energy sources are derived from solar, geo-thermal, green hydrogen and wind, producing only benign by-products and waste residues that can be safely recycled. In the short-term, black coal and gas should be reserved as complimentary sources of peak demand supply only, and in the long-term for their high value chemicals and steel-making characteristics.

6. The first ever proposal for a carbon tax was originally made by English economist AC. Pigots in 1920 in response to the over-consumption of resources and to address the full cost of industrial processes that are responsible for pollution, sickness, poverty, conflict, the loss of biodiversity and natural capital. Pigots proposed that a carbon tax should be revenue neutral, protect the impoverished, the poor, and which allows business and consumers time to adapt, plan, and reinvent processes.

7. Many companies are well prepared for a domestic and/ or international carbon economy which include - NAB, BHP, GE, Google, InterfaceFlor, Patagonia, 3M, BMW, and many more.

8. At the end of the day, sustainability is only possible if business is presented with a market mechanism that rewards action leading to a clean economy. Sustainability in its most basic form is about eliminating all forms of waste, and this requires a price on pollution including processes that continue to convert natural resources into landfill.

Finally, we should ALL remember that the purpose of a Carbon Tax or ETS is to reduce the acceleration of climate change and pollution, and limit global temperature increases to +2oC by 2050.

Read the background information at Wikepedia.

David Burns is a Sustainability Advisor and Analyst, www.sustain450.com.au

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John Choi, Choi Ropiha Architects
Tue 13 Sep 2011 agree_icon Agree (1) disagree_icon Disgree (0)

I came across some interesting data. Between 1960 and today -

1. Global population has doubled

2. The GDP has increased 18 x. A measure of consumption. I = P × A × T

Human Impact (I) on the environment equals the product of P= Population, A= Affluence, T= Technology.

Based on IPAT, our footprint should have increased in the order of 36 times. However, footprint has only grown 2.2x and if you remove the carbon portion of it, it has only grown ~15%.

Is this a demonstration of how significant the role of technology is in tackling sustainability?

Nigel Broomhall
Sun 28 Aug 2011 agree_icon Agree (1) disagree_icon Disgree (0)

Some great comments, and it's always fascinating to see how the word sustainability garners so much emotion:) Speaking purely from an NZ perspective, pursuing a low carbon future is logical for the differentiated position we have projected to the world - 100% Pure, Clean and Green New Zealand. It is also logical for a country that has a dependance on foreign oil for transportation as vehicles move towards an electrified future. So it makes sense from a export position, and from a national security/foreign fuel independence perspective. And even with these macro drivers, we have still implemented a carbon tax. Why? Because in the absence of this, it is human nature to go for the lowest cost solution, which in our case would be large base-load thermal plants, probably fueled by coal or gas. Which would not be aligned with our international position. But for countries which are resource rich, such as Australia, which have large coal reserves, and have little rainfall thereby requiring large desalination plants (which is directly correlated to energy production), I believe in the absence of a regulation mechanism such as a carbon tax, there would be no behavior change. It would take a brave senior executive to present the business case for this, when it is likely to be more expensive than the status quo. But changing the financial dynamics in a world where the CFO has risen in company importance will get attention, and will change behavior. Smart companies will work out how to mitigate/eliminate this tax by changing behavior, and that can only be a good thing long term.

Mike Llyod
Sun 28 Aug 2011 agree_icon Agree (1) disagree_icon Disgree (0)

The scary thing about either a carbon tax or ETS (to be honest I am not sure which is better, each has their advantages and disadvantages) is that this will force behaviour and investment changes, both by consumers and businesses. Most people do not like forced change, and for good reasons in many cases. I think this is why the Coalition has chosen its direct action model - while a big government approach is arguably against free market principles, it is perhaps the more conservative approach as the amount of change is minimised, and all voluntary - nobody will be forced to apply for govt funding for new CO2 reducing projects. And the Liberal party admits and takes pride in being a conservative party. On the other hand, change can sometimes be good for us, particularly in the long term...which is why I support a price on carbon whether by an ETS or carbon tax model.

Eric Hill
Sun 28 Aug 2011 agree_icon Agree (0) disagree_icon Disgree (1)

Incentivate business to turn to alternatives away from fossil fuels, conserve our energy, respect our environment. The emissions will look after themselves.

David Smith
Sun 28 Aug 2011 agree_icon Agree (0) disagree_icon Disgree (1)

I agree Paul Hawken is 100% right! Great in theory, but that notion ensures 0% investment moving forward = status quo. The reality is that a move to encourage alternatives (not a complete move away from fossil fuels) will require incentives or else we will continue to eat up the cheapest option. Once these industries are set up via incentives (price on carbon / ETS) you can't just decide one day down the track to "change the model". That's what our government continues to do ~ change the bloody model... This continues to cost massive amounts of jobs and long term investment strategies throughout Australia. In the last year or so, we have witnessed industries like Cattle, Forestry, Renewable Energy via anticipated CPRS be smashed etc etc.. Our government must STOP tinkering with industries and supportive legislation and simply allow investment to occur. This carbon tax is a joke ~ brings on an ETS now that encourages offsets as negotiated, worked out with industries and agreed by all under the CPRS! Bloody politicians, village idiots!

Alex Zapantis
Sun 28 Aug 2011 agree_icon Agree (1) disagree_icon Disgree (0)

I am not a climate scientist (physicist by training) so I am not qualified to comment authoritatively on the anthropogenic climate change hypothesis. However I have read IPCC reports, and my company (Rio Tinto) has sought expert advice from respected climate scientists. The conclusion is that the hypothesis is very strongly supported by relatively simple and established scientific theory and observed data, but that there remains very significant uncertainty about the climate's sensitivity to increasing GHG concentrations in the atmosphere. Of course we don't know what we don't know!! Newton's Laws of motion served us perfectly well for a couple of hundred years until Einstein showed them only to be approximations!!

Rob Gell
Sun 28 Aug 2011 agree_icon Agree (1) disagree_icon Disgree (0)

It's our economic system that's unsustainable. A carbon tax is just one instrument that endeavours to manage the "type" economic example of the externalisation of costs qv Garrett Hardin, Ernest Schumacher etc. Have a look at http://bit.ly/pvvgJ6 and go to http://bit.ly/qDm0rF

Andrew Barson
Sun 28 Aug 2011 agree_icon Agree (1) disagree_icon Disgree (0)

Maybe the title should refer to climate stability rather than sustainability. Reducing CO2 usually has consequential additional environmental and social benefits, but not always (eg. the 3 gorges dam). Is climate stability possible without a carbon tax? Sure. Will it happen without some kind of intervention such as putting a price on carbon? Not fast enough if at all. David, the tax came about before the ETS because they couldn't reach agreement on the caps that would be imposed for the ETS. The carbon tax agreement that Labor, The Greens and the independents have worked out creates a commission that can draw on experts to set targets, without (hopefully) worrying about the election cycle. I'm not completely happy with the tax, but I think it's miles ahead of anything Abbott and co have offered, and much, much better than doing nothing.

Sat 20 Aug 2011 agree_icon Agree (0) disagree_icon Disgree (1)

I agree. CO2 emissions are a form of waste and the same way we are paying for solid and liquid wastes to be disposed of, we also need to pay for gas wastes such as CO2. It is an externality and it should be internalised into the economy. Right now gas wastes are subsidised and as an advocate of capitalism I believe there should be no subsidies in the market and I perceive carbon price as a step towards a fair market. I am against any direct action imposed by the governments.

David Smith
Sat 20 Aug 2011 agree_icon Agree (0) disagree_icon Disgree (1)

So why can't we all just move straight to an ETS? Why the need for a carbon tax first? Isn't a carbon tax just a redistribution of tax $$ to others within the community. Shouldn't they just call it a mining tax and move on to an ETS wherein offsets can be created sooner?

Sat 20 Aug 2011 agree_icon Agree (1) disagree_icon Disgree (0)

Hi all, good comments so far and I have to say I agree with Ken and Jonh. I will like to comment based on a slightly different hypothesis: A carbon tax will favour sustainability True if sustainability is seen as renewable energy vs fossil fuel CO2/ climate change and AGW perspective and on that sense I agree that a trading mechanism will bring a cleaner energy matrix and better consumption habits. False though when Sustainability is seen as more than CO2. I am yet to see how a CO2 focused mechanism will do anything for the SINK (IT waste?) and SOURCE (fish stocks?) problem or POVERTY (India) and HUNGER (Somalia) or WATER scarcity. I don't think a carbon price will do much for some of the most pressing and tangible Sustainability issues facing mankind. About the initial hypothesis, well of course sustainability is possible without a price on carbon, the only difference is the pace of change for one of the areas that we need to be more sustainable with.

John Carnegie
Thu 18 Aug 2011 agree_icon Agree (1) disagree_icon Disgree (0)

There isn't a one-to-one relationship between carbon pricing and sustainability. Carbon pricing is simply one (albeit important) leg of sustainability. Think business ethics, water management, and animal husbandry. Govts are increasingly recognising that there is a broader shift occurring than the internalisation of a cost of carbon with the introduction of an emissions trading scheme. That is, the shift in consumer preferences – consumer preferences and information requirements are fundamentally changing, creating market opportunities. I think that its important not to be too fatalistic about consumers not caring or businesses not leading. Think Tescos, Walmart, Unilever.

David Burns
Sun 14 Aug 2011 agree_icon Agree (1) disagree_icon Disgree (0)

Hi David - the reason i have come to my opinion that 'Sustainability is Impossible with a Carbon Tax' is because I have accepted that the majority of consumers don't understand what sustainability is or how to integrate it into the economy.

It is quite interesting that if individuals on the demand side and business on the supply-chain side implemented radical energy and water efficiency, including design to eliminate waste and non-recyclable materials, then the community would not need a government carbon tax to force us to act, and avoid all of the associated administration costs.

Unfortunately, most people think these issues are someone else's problems to solve, and therefore I believe that the cultural change and technology transitions needed within the next decade can only be driven by business who have a new set of economic rules set by government to make this transition easier. I agree with your notion, and I wish this situation was different?

David Stuart-Smith
Sun 14 Aug 2011 agree_icon Agree (0) disagree_icon Disgree (2)

A low CO2 economy is certainly possible without a carbon tax or ETS. It would also be more efficient - administering such schemes inherently add new overheads to the economy. Unfortunately it seems that individuals and firms will generally not make the required changes without the government first tilting the playing field to make it a simple financial decision and on a more or less universal basis.

Malcolm S
Fri 12 Aug 2011 agree_icon Agree (1) disagree_icon Disgree (1)

Depends on whether or not sustainability takes into account the economic activity required in order to meet the additional cost of "sustainability" price signals. Economic activity generates waste, requires energy and contributes toward "entropy". For example If an organization faces a 10% increase in its cost of goods sold, if its margin is 30%, it needs to generate 23% more sales to make up the lost margin. The more goods sold, the more waste generated, the more price signals need to be applied to ensure "sustainability".

Lucy X Qian
Fri 12 Aug 2011 agree_icon Agree (1) disagree_icon Disgree (0)

Agree! Only if businesses realize that they have to bear extra cost that they will start to think about alternative solution.

Eric Hill
Fri 12 Aug 2011 agree_icon Agree (0) disagree_icon Disgree (0)

I tend to agree with you Robert, good comments and insights by all.

Robert Wulff
Fri 12 Aug 2011 agree_icon Agree (0) disagree_icon Disgree (0)

Given the present cost differential between renewables and fossil fuels, environmental sustainability is presently hard without a price on carbon. Whether a tax (as opposed to a properly structured ETS, feed-in tariff, etc ) is the best model is a matter for considerable debate. Taxes are very blunt instruments. Sustainability can also be a driver for change and innovation in an organsiation, regardless of whether you have a carbon tax or not.

Nigel Morris
Wed 10 Aug 2011 agree_icon Agree (0) disagree_icon Disgree (1)

Not impossible, but likely more expensive (see recent Productivity Commission report), likely more patchy, and likely slower. Therefore, likely more adverse effects. Good blog article.

Sun 24 Jul 2011 agree_icon Agree (1) disagree_icon Disgree (0)

Hi Dave, Thanks for the simple logic which explains the reasons for a domestic carbon tax, and helping me understand that the carbon tax is not just about reducing carbon dioxide emissions. As a bit of a skeptic and business owner, I had not understood that using carbon as a single economic level could also reduce all other forms of pollution discharging into our environment (water, soils, air, and food streams). Although it is tough at the moment as a small business owner, if this was explained to me in this context, I might feel more comfrtable in contemplating a carbon tax a bit more. Maybe the government should use your master equation to try and explain their message better?

Misho Vasiljevich - Misho & Associates (Architect)
Thu 21 Jul 2011 agree_icon Agree (2) disagree_icon Disgree (0)

Once we pass the critical 350-400 parts per million of carbon in the atmosphere and the increase in global temperature occurs, watch the human species panic, no turning the clock back then. We are a greedy self-centred country that needs to feel what its like to be deprived of the basics. Unfortunately we place procreation and "consumerism" over survival and sustainability. Keep getting the message out David.

Thu 21 Jul 2011 agree_icon Agree (3) disagree_icon Disgree (0)


With all the negativity around the carbon tax I had lost hope there were still sane people left and hence it was refreshing to read your blog "sustainability is impossible without a carbon tax".


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