Magazine of Socialist Action in Australia

Market solutions won’t prevent a climate disaster

Reading Time: 3 minutes

We are on the verge of a disastrous change in global climate, and none of the dominant parties are offering realistic solutions. The current ALP proposal, supported by the Greens, is the use of a pollution tax to increase the cost of carbon emissions. According to the market logic accepted by these parties, this will encourage people and industries to decrease their use of pollution intensive energy sources, and find alternatives.

The search for alternatives is a worthy goal. But a carbon tax shifts the burden of achieving this goal onto individual working people and families. Petrol taxes have not led to the widespread use of alternatives to car transport – instead, the cost becomes part of the family budget. Rather than having government and industry pursue solutions directly (by investing in renewables), politicians expect society to find it’s own solutions – to avoid the expense of a new tax. The irrationality of this approach is hard to overstate.

It is related to another market-based approach to climate change, the emissions trading scheme. By having industries trade in pollution permits, the hope is that the choice of which sections of industry to phase out would be made by an impersonal mechanism, lowering the political costs of change for the government.

Market solutions have an unplanned, irrational aspect even in times of economic growth, but we are currently facing a global recession. Australia has yet to feel the full extent of the crisis, but our economy is connected to the global economy. Wayne Swan’s recent budget already reflects the desire of the ruling class to begin starving Australian society, to preserve profits from a crisis.

The economic crisis has already meant that industry is cutting costs. The US and the European Union have seen a decline in emissions as a direct result of the crisis but despite this dip emissions remain on a strong upward trend. The idea of solving the greenhouse problem by adding to the burden which created this decline is almost morbid. Even if you accept the basic market logic, investment patterns are unlikely to change for the better under recession conditions.

Some advances have been made in convincing capitalists to invest in alternative energy. But these have all been under conditions of public regulation and incentive schemes. They have not gone far enough. In some cases, renewable industries created by these schemes have since been allowed to die, with a lack of government support.

Investment must occur on a much larger scale. Capitalist investors cannot rise to the challenge – they demand a reward measured in increasing profits, not social good. The investment must be public, and the oversight and direction must be democratically planned. Private profit – the same factor that has caused capitalists to fail us in their investment decisions – will be an unacceptable drag on the urgent research, development and funding of renewable energy.

To shift energy generation to renewables, energy companies must be brought into public ownership. Alternative energy industries must be built up. Real democratic planning is needed to direct the transition to clean energy. We cannot allow a chaotic process that fails to take workers and ordinary peoples concerns into account.

Even the best case scenario under the carbon tax requires a market-led death for the fossil fuel industry. This implies the wasting of resources and jobs. Instead, a socialist approach would be able to make a humane transition. Workers could be retrained for new roles, old energy sources could be strategically phased out, and the current holdings of energy companies could be rationally redeployed. We need real democracy in industry, to ensure that the incentives for development are the real social needs of all people.

This is why the Socialist Party stands for a democratically run socialist planned economy whereby the needs of people and the environment would be put before the needs of the fossil fuel industry.

By David Elliott


The COVID-19 pandemic has laid bare many of the problems with capitalism. The Socialist strives to explain the systemic causes of this crisis, and reports about the issues that are important to working people. We also help to organise struggles against the powers that be.

We don’t receive a cent from big business or governments. Our work is fully funded by our supporters. Even if half the people who read our website every month donated a few dollars each we would raise thousands to help our work!

We need organisations of struggle now more than ever, so if you support what we do please consider making a donation.

One-off or regular donations can be made securely HERE.