Ideas@TheCentre – The CIS newsletter (Sydney), 20 March 2009

Kermit the Frog famously sang ‘It’s not easy being green.’ Many politicians would agree with him. Voters regularly tell pollsters that they would like to see more green programs in place. However, when it comes to paying for such policies, they are somewhat less enthusiastic. Wash me but don’t wet me, seems to be the motto.

This may explain the government’s peculiar approach to the carbon emissions from road transport. In theory, it would be very simple to reduce them. All you need to do is make petrol more expensive, say by taxing it more highly, and people would try squeezing more miles out of each litre. This would be easy, but that’s not how politics works.

Knowing that tax increases are very unpopular, the government has excluded petrol from its planned emissions trading scheme. There was only one problem: How could they still be claiming they were doing something about carbon emissions from transport?

Someone in the government came up with this solution: ‘If we want to save a few jobs in our ailing car industry, why don’t we say we are really doing it for the environment?’ And thus, a brilliant idea was born, ’The Hollow Men’ style – Kevin Rudd’s deceptively labeled ‘New Car Plan for a Greener Future.’

Without the spin, they should have just called it ‘The Car Plan.’ Neither was it new, nor had it anything to do with the environment – and it certainly was not helping pave the road to a green future.

Essentially the plan provides $.6.2 billion in subsidies to Australia’s car manufacturers in return for some vague promises to develop new, fuel-efficient cars … like a Holden running on four cylinders. Hardly revolutionary stuff, but certainly sufficient to keep the bosses of Holden, Ford, Toyota, and their mates in the trade unions happy.

It takes a degree of chutzpah to hand over big subsidies to the car industry only to claim that this was a great environmental achievement. It’s the political equivalent of having your cake and eating it.

Kermit the Frog knew it, and Kevin the Prime Minister knows it too: It’s not easy being green, but at least Kermit was better at it.