What’s wrong with pricing carbon anyway? Lessons from an old film laboratory.

I think there’s a lesson about the carbon price that can be found in the now dying business of film processing.

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Tony Abbott talked about a “great big new tax”. If nothing else, that misrepresentation of the nature of the carbon price suggests that he really opposes it for the sake of opposing the Labor government that introduced it, not because he thinks it is bad policy.

The thing is, I don’t understand what the objection to pricing carbon really is.

ImageSome years ago I worked for a large film processing laboratory. It’s an almost dead technology now that cinema is digital, but in the heyday we processed millions of feet of film each week. That used a lot of water and chemicals – some of which, while not the worst substances ever invented, were not at all good for the environment. Those chemicals turned up in the processing wash water and other used chemical outflows, and in the early days went straight into the sewer. Because they didn’t break down like organic waste, those chemicals would eventually find their way into the rivers and ocean.

No big problem at first – it was a small operation, and the chemicals were diluted with heaps of water. But as we grew, the Water Board took more interest. And we found we had to pay. We had to pay for every litre of water we took from the mains, and again for every litre of waste that went into the sewer. Then they measured how much of those chemicals were in the waste water, and we had to pay for that. If we exceeded an agreed limit, we had to pay a hefty penalty rate as well.

You’ll notice this is a bit like paying for carbon dioxide emissions. Small companies – not a problem. Bigger ones charged according to how much they emit. But we never for a moment thought of our charges as a “tax”. It wasn’t a “sulphite tax” or an “ammonium tax”. It was simply a fee we had to pay to release pollutants into the system.

DSC00060How did we react to these increasing charges? We looked for different chemicals that weren’t such a problem. We found ways to recycle more of the waste chemicals. Our chief chemist developed a system for recovering and recycling up to 90% of the wash water we used. This turned out to be world-beating and the technology was adopted by labs in other countries. We developed systems that even the huge labs in Hollywood didn’t have.

Why is it so hard for fossil fuel users to take the same approach to reducing their costs?

Joe Hockey, the new Federal Treasurer, criticises the carbon “tax” saying it is misconceived because it won’t reduce the use of electricity. He says it’s an inelastic commodity: in other words, we use the same amount even if the price goes up. As it happens, even that isn’t true.

But the point of pricing carbon isn’t to reduce electricity usage: it is to reduce carbon dioxide emissions. It’s an incentive for companies to look for other ways to produce electricity, to reduce their costs – and a way of raising some of the funds necessary for that. That won’t happen overnight, it takes a long time to replace generating plant. But that’s a good reason to start sooner and not to give up.

chemmixBack in the film laboratory, any suggestion that the water and discharge fees were a “cinema tax” or designed to reduce cinema attendance would have been ridiculous. But that, in effect, is what the critics of pricing carbon are saying. Any suggestion that the charges would make our lab in Australia uncompetitive was just nonsense. Labs around the world used the same processes, and pollution problems were the same everywhere. Our response was based on a sense of environmental responsibility as much as on costs. And it actually made us more competitive, not less.

That company has now closed down its film processing operations.  It wasn’t financially ruined by environmental considerations: as before, it moved with the technology, and it’s now a successful digital post-production facility. It’s in Mr Hockey’s electorate. Perhaps he and his Coalition colleagues should take a lesson from its story, and reconsider their dismissal of new technologies, and their obstinate determination to abolish carbon pricing. It should be an effective tool in the challenge to clean up emissions and stem climate change.

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