Carbon Price in US -Important Implications for Australia

Those who followed the mid-term US elections will be aware of the larger than expected victory of the Republican Party. But the main reason for this has not been reported in the Australian media and nor have the implications for Australia been well identified.

My letter below published in today’s Australian argues that the implications for the Australian political scene are considerable because it means the US will  not impose a price on emissions of carbon dioxide, let alone a tax. This makes it futile for the Opposition to continue with a pricing policy if elected.  It also provides an opportunity for Abbott to publish an analysis arguing that the many uncertainties about the dangerous warming thesis justifies a policy of not taking any further measures to reduce usage of fossil fuels and suggests a need for a review of existing policies, including subsidies to wind and solar energy.

The case for publishing such a policy is enhanced by what appears to have been the main reason for the extent of the Republican’s victory in the US. As indicated in the Wall St Journal below, a large number of Republicans ran giving strong support to a policy of using coal, oil, and natural gas.

Such support does not appear to have simply reflected the success of fracking and the return of the US to be a major oil producer. As indicated in the article, climate change rated last in a Gallup poll on issues in the mid-term election.

Reports in today’s The Australian suggest that an initial move by the Republicans will be to test whether Obama will veto legislation approving construction of the Keystone XL pipeline to carry oil from Canada to the US. It appears that stopping this pipeline was a principal objective of the billionaire who decided to help finance Obama’s green policies.

The revelation of increased support in the US for usage of fossil fuels is also relevant in Australia. If the Victorian Liberal/National party coalition had taken the initiative and not stopped fracking, it might have reversed its losing position in the polling for 29 November. The failure of that party to risk adopting policies that would be controversial but justified, including a much tougher policy on trade union disruptions, has been a major loser of votes when it could have been a winner