Carbon trading schemes have become the most favoured government strategy to deal with climate change, including in Australia. But as economics professor Clive Spash found out, government employees who question whether such schemes can actually deliver emissions reductions can find themselves under huge pressure to be silent.
Spash wrote a paper critical of emissions trading schemes called The Brave New World of Carbon Trading in 2009. The paper aimed to "point out some of the pitfalls [of carbon trading] which seem too often brushed aside".
His then employer, the Commonwealth Scientific and Research Organisation (CSIRO), reacted to this implicit criticism of government policy by trying to brush his entire paper aside.
CSIRO management refused Spash permission to publish the essay. Later, the New Political Economy journal agreed to publish it, with a disclaimer saying no association existed between the paper and the CSIRO. The CSIRO then pressured Spash to make changes to his paper so it could formally release it. When he refused, the organisation released it but stressed that it was not linked to the CSIRO.
The essay may never have been published at all if Spash hadn't decided to speak out against the censorship. In December 2009, he resigned from the CSIRO to ensure The Brave New World of Carbon Trading could no longer be suppressed.
Spash spoke at a public meeting titled "Why carbon trading will fail" in Sydney on March 2. The meeting was sponsored by Solidarity, Sydney university climate action collective and the Parramatta Climate Action Network. Spash will also speak in a session at the Climate Action Summit in Canberra, March 13-15.
His March 2 talk summarised the main themes of his controversial paper.
The economic textbook assumptions that underpin carbon trading models bear little resemblance to reality, he said. Rather than achieving emissions reductions, carbon trading schemes in other countries have delayed genuine action to sharply cut greenhouse gas emissions.
Supporters of emissions trading say that it's the most efficient way to reduce carbon pollution. But in practice, what is "efficient" and profitable for big polluters is not necessarily efficient for the Earth's ecosystem, which requires a rapid phase-out of fossil-fuel use to avert runaway climate change.
Spash's paper explained why big business much prefers carbon trading schemes over pollution taxes and direct government regulation. "Powerful vested interest groups support permit trading for good self-interested reasons. Polluting industries see the potential for massive financial rewards in return for their participation …
"Emissions trading in itself cannot … provide polluting firms with certainty about future carbon prices (despite the confident predictions of economic modellers). Its attraction is more likely to relate to the potential windfall gains of free permits."
He told the meeting: "It's not possible to redesign these schemes to make them work. The level of certainty assumed is purely unavailable."