by Sukrit Sabhlok

Created on: May 04, 2008

4 May 2008

There is continuing debate among scientists over the extent and causes of global warming. Some say warming will be minimal. Others argue the world is facing a significant challenge that could harm future generations. Almost nobody is suggesting that the planet is cooling.

Yet science is only half of the debate. The other half is concerned with the appropriate policy response. This involves economists, not scientists. Unlike the scientific debate, the debate on what exactly should be done in response to global warming is not even close to completion. Here too, there is diversity of opinion. Some say Australia should implement a carbon tax. Others prefer a carbon trading system. Most agree the best solution would be that which reduces carbon dioxide emissions and also does not harm economic growth.

The Rudd Government has acted quickly, without waiting for the economics debate to run its course. A new department dedicated to tackling climate change has been established. Its mandate is to implement and recommend policies that would reduce Australia's greenhouse gas emissions.

But there's a problem. While the bureaucrats in the Department of Climate Change are busy coming up with ways to ward off the global warming bogeyman, their colleagues in the Department of Industry are diligently subsidising the very fossil fuel companies that contribute to global warming. A study released by the Australian Conservation Foundation in 2006 found that a large amount of corporate welfare is given to causes that hurt the environment. As The Age reported on October 29 of that year, "Analysis of this year's federal budget papers reveal that programs for activities that increase greenhouse gas emissions will attract total funding of about $8 billion in the 2006-07 financial year".

Does it seem odd that two agencies are actively working against each other? It appears to be accepted practice within government, judging by the lack of protest.

About $570 million was distributed as industry assistance to car manufacturers. Of course, eliminating this subsidy could result in the loss of jobs. However, as the car industry receives recurring grants on an annual basis, it would be cheaper to give every sacked worker a taxpayer funded severance payment than to persist with a policy that not only harms the environment but also distorts the market.

Some environmental groups prefer increased government spending on other more "appropriate" programs regardless of whether the aforementioned

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