How to Answer the Birthday Cake Question

This article was published under a different title at ABC’s The Drum, available at

Anyone within throwing distance of a TV or radio at the moment is probably well aware that we are well in the midst of a new communications war over action on climate change.

Listening to the opponents of a price on pollution, it’s clear that their messages are based on a strategy deeper and more focused than just undirected vitriol at the Government’s proposal. Their strategy is clear: the way Abbott and the polluter lobby plan to win is to emphasise the impact on households and pretend that the point of a “carbon tax” is to tax individuals and families for electricity. Abbott is even using the phrases “electricity tax” and “carbon tax” interchangeably in interviews on Insiders and elsewhere. This completely ignores the fact that a price on pollution is designed to target big polluters, not households. Any flow-on impact on electricity bills and cost of living is a side effect that can be easily ameliorated if the Government chooses to do so.

The new Abbott-polluter lobby strategy is remarkably similar to the anti mining tax campaign. The mining tax was aimed at enormous multinational companies. But when you’re earning billion dollar profits, it’s pretty hard to get sympathy and cry poor, so instead they used the faces of “everyday Australians” and managed to convince – or con – people into believing that this tax was actually a tax that would hurt the public rather than the companies it was designed for. This strategy was so successful that for a $22 million advertising spend, the mining companies saved themselves $60.5 billion over 10 years. As Jessica Irvine from the Sydney Morning Herald calculated: “for every dollar the mining lobby spent fighting the tax with emotive ads, featuring wholesome-looking miners, it saved another $2750.”

Now, that same strategy is being repeated in the price on pollution debate. Even though in reality a price on pollution is designed to cut pollution from big emitters and make clean energy cheaper, Tony Abbott will keep repeating the following mantra related to the cost of living: “A carbon tax is a great big new tax on everything that Australians’ can’t afford”. This appeals to people’s selfishness, short sightedness and sense of being cheated by a Government they feel isn’t capable of spending their tax dollars properly. Abbott will do his best not to talk about what the tax is for (tackling climate change) because that gets into questions of the benefits and whether it’s worth it, which would complicate his frame.

Early indications show that the public, prompted by shock jocks and the tabloid press, is already adopting the frame behind the scare campaign. On Monday night’s Q and A, an audience member asked the Assistant Treasurer Bill Shorten how much the price of a birthday cake would rise after the “carbon tax” came in. It was a nod to the famous question that undid John Hewson over the first attempt to bring in a GST. Watching Shorten struggle to answer this question was so painful I was almost at the point of throwing something at the TV.

There are two ways that the Government, the climate movement, and all of us who support action on climate change can respond to the ‘carbon tax destroys families’ frame.

1. Strengthen the Way we Communicate Pricing Pollution

The answer to the birthday cake question – or any question about cost of living and electricity price rise questions – should have been something like this:

A price on pollution is designed to reduce the pollution of Australia’s biggest polluters and make clean energy cheaper. It’s designed to target really polluting industries like aluminum smelters, which use huge amounts of energy and pollute enormous amounts of carbon into the atmosphere. So unless your cake is using large quantities of industrial scale aluminium, putting a price on carbon really isn’t going to affect your family very much apart from ensuring that your kids have clean air, clean water, clean soil and a safe climate into the future. Sure, there’s a chance your cake might cost a few cents more, but we’re not in the business of reducing pollution from baking – we’re in the business of reducing pollution from coal, oil, aluminium, cement and those kinds of industrial pollution.

There are three things to keep in mind that work with the public when talking about a price on pollution:

  • A price on pollution is not like the GST, which was a tax designed to “simplify the tax system.” This price has a clear purpose: cut pollution and ensure clean air, water, soil and a safe climate for our kids. Pollution is making climate change worse, and putting a price tag on pollution helps fight climate change and reduce pollution. The bottom line: our kids are worth it.
  • A price on pollution is designed to cut the pollution of Australia’s biggest emitters – like electricity generators, aluminium smelters & the cement industry. It’s designed to incentivise these businesses to clean up their act and move toward more efficient production processes. It’s not focused on households, and even though some price rises may pass on to households, the Government can and will support families by giving them money to help with electricity bills if they’re struggling.
  • A price on pollution means unlocking the future of clean energy in Australia. We can make big progress away from the energy sources of the past and into the clean energy sources of the future. Australia is a nation that can do big things in clean energy – and this means new industries, new jobs and big nation building projects.

2. Consider Changing the Policy to Exclude Households

Anyone with a basic understanding of economics and greenhouse emissions knows that the objective of a price on carbon isn’t to change the behaviour of households through taxing them: it’s to change the behaviour and investment profile of Australia’s biggest polluters. It’s to incentivize investments in clean energy. Yet because of Abbott’s cost of living frame, the public is getting very confused about what a price on carbon is designed to do. In short, they think it’s targeting them.

One way to respond unequivocally to this frame is to exclude domestic electricity bills from the scheme, as argued by Richard Denniss from The Australia Institute. This could simply mean rebating households for any rise in their electricity bills from a price on pollution. Or, as Richard Denniss has stated, it could be done by taking some of the revenue collected from the coal fired power stations and providing it to electricity retail companies to ensure that they had no need to pass on any price increases. We already know that when it comes to electricity, price doesn’t drive behaviour; so emitting household electricity will have a negligible impact on actual emission reductions.

The result is a price on carbon that is only paid for by the big polluters. It neutralises much of the electricity price rise and great big new tax frame and leads to a simple policy that’s easy to explain.

In the end, what’s the difference between a “carbon tax” and “a price on pollution”? The difference between these frames is that one will win the public debate on action on climate change, and one will lose it.

About annastarrrose

Author & environmentalist
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