$50 a month

 

Legal Eagle has a post on her participation in an SBS Insight program concerning Climate Change which is to be aired this coming Tuesday night.  I take it that participants were screened or selected with some intent for a “balanced” though not necessarily representative group to represent competing concerns.  LE was there as a climate change skeptic on the left.  Well, a little bit on the left, anyway, as she herself recognizes.  (I can’t help thinking that LE’s perspective on her position to the left is slightly skewed by the company she keeps – an observation which is not intended to disparage that company at all, but simply to characterize it.) 

In particular I think it is fair to say she was there because she had two concerns:

1.What about the poor? Or: (to put almost the same question a different way) what about inequality? and

2.What if climate change science is wrong?

Her ultimate conclusion is:

It’s natural that people should wish to question climate change science when it has a large impact on them, but somehow climate change science has become politicised. Generally, as Pearson notes, those on the right are sceptical, while those on the left are “believers”. (As I said above, I am a rare exception to that rule, although I met others on the Insight program – it’s nice to know I’m not alone!)

When an issue gets politicised like that I get very worried. I must confess that I don’t really understand why the Left has decided that it will swallow climate change policy whole (which is distinguishable from the question of science). I know that one of the ideas of climate change policy is the idea that we should consume less and be a less capitalist society (which clearly fits into many leftist ideas). But surely another concern of left-wing people should be the perpetuation of the class system and the deepening of the divide between rich and poor. To me, it seems that anyone who is left-wing or progressive should also be concerned about potential effects of some suggested climate change policies on less privileged members of society, and that they should be concerned about the possibility of an elitist society if we institute the suggestions of commentators such as Clive Hamilton or George Monbiot. If we implement any policy, I believe we have to be really careful that it doesn’t create a more unequal society.

It doesn’t seem to me that this last sentence depends upon climate skepticism at all.  Even if you believe in climate change and the necessity for whatever action is being proposed, you can be worried about the poor.

Incidentally, that reference to “the possibility of an elitist society if we institute the suggestions of commentators such as Clive Hamilton or George Monbiot” is a bit of a shibboleth.  Disparagement of “elites” is these days mainly the territory of the post-Howardite or otherwise populist right.  I have my own suspicions of how it has been stirred up by those with vested interests in carbon consumption in what, judging by most of their other conduct, has always struck me as a very partial solicitude for the interests of the poor, whom they are otherwise so often ready to leave to the mercies of the market and the chances of protection by some “trickle down effect.”

The poor, as has been famously remarked, are ever with us.

[Do I need a special semi-irony notification to go with that?]

But LE is not talking about the very poor or at least the very poor who qualify for state assistance, because at least for purposes of argument, she admits that they can be protected by an adjustment of their assistance.  That must be so, subject to the inevitable way that some people fall between the cracks of such programs for one reason or another.

That is what I saw on the Insight program: ordinary people who would struggle mightily if energy prices were raised by $50 a month. And they were scared. On the one hand, you have this disastrous prediction of what will occur as a result of climate change. On the other hand, you have the certain prospect of having to pay more for fuel which will necessarily have a massive impact on your life. As one woman said, “If we do things about this, it will have a huge impact on the economy and our whole country, so I think it’s really important to know whether it’s really necessary or not.”

She says, taking a cue from Noel Pearson, one of her favourite commentators (though not one of mine):

For a person who is economically secure, an extra $50 a month for fuel and added costs of various commodities isn’t going to be a tremendous burden. It might hurt a little, but it isn’t going to break the bank. Thus, it’s understandable that most people who are middle-class and educated want to take action on climate change — for them, the risk of possible environmental catastrophe is far greater than the risk of paying a bit more for every day items. However, for a person who is less economically secure, an extra $50 a month for fuel and added costs of commodities is going to be a tremendous burden. I’m not talking people on the poverty line here (who would probably be covered by government rebates). I’m talking about working people who are not really well off, but who are not poor enough to be helped by the government. I’m also thinking of people whose business is going to be badly affected by any change in the structure of our economy. For them it’s a balance between immediate incontrovertible financial pain versus speculative future pain. This is why it’s a “wedge” issue for parties like the Labor Party in Australia. They just can’t please everyone.

LE is talking about the people who are too well off to receive state assistance which will provide such offsets to an additional expense for energy which she takes to be $50 a month.  Inevitably, if only because they are just above the cut-off line, there will be people who are sensitive to such an additional expense.

In my opinion, we are talking about the relatively poor rather than the absolutely poor in this case.  It could be couples with 1-2 kids with two below-average incomes amounting to about $70-$80K -between them (I’m guessing at the figures here, but you could easily get to that figure with, say, the father earning $40K and the mother working school hours and working $30K) and paying off a mortgage.  Even they would be relatively well-off compared to those who were renting, and within that group their relative poverty would depend on how much of their homes they already own or, from a cash-flow point of view, how long ago they took out their mortgages (the older the mortgage, the smaller it will generally be because the house will have been cheaper).

The hip pocket nerve is a funny thing.  It’s very subjective.  What seems expensive very much depends on how much you want to spend money on it.  Even then, people have varying capacities for both frugality and tight budgeting (which is not necessarily the same thing, because in particular it relates to the fixed expenses which you are prepared to incur).  Obviously to anyone who reads this blog, as an avid attendee of concerts and operas which cost about $100 a pop (often more; rarely very much less), I am not a frugal person.  On the other hand, I have so far baulked at the fixed expense of a mortgage because (a) I am feckless – I am not even as the hare to the tortoise, but rather as the grasshopper to the ant; (b) I am insufficiently sure of my future income to make the commitment and (c) in my early years as a solicitor I was at the pointy end of enforcing securities against farmers and small business people who were destined to lose their farm or home as a result of either changed economic conditions (including the recession we had to have and the decline of the small family farm) or simply the failure of their own venture for reasons particular to that venture.  I later worked on the other side for borrowers to save what they had by whatever ingenious defence could be devised (the best defences were reserved to farmers under the Farm Debt Mediation Act).  Either way, it made me risk-averse.

So for me, it is difficult to empathise with concern at an additional daily expense of just under $1.70 or so a day for energy bills for a household.  Even when poor (including when I was putting myself through law school at the same time as Noel Pearson when he was able to come to Sydney to attend – in his final years  he was already executive director of the Cape York Land Council), I have not been able to or prepared to cut my cloth so fine as that.  To put it bluntly, so far as the relatively poor who own their own homes or are paying them off are concerned, I think they could find that money to meet the long-term risks posed by climate change, even if the science turns out to be wrong (and the present scientific consensus is overwhelmingly that it is not: that is clear to me from any of the genuinely scientifically educated people I know). 

If the question is really a question of protecting the poor, there are a lot more social adjustments from the left which could be taken to correct the situation (and, as I have hinted, treatment of home ownership versus renting in Australia is probably the biggest single one) before $50 a month ought to be a critical obstacle.  That these adjustments don’t gain much political traction in Australia is because the relatively poor have bought the hope that they may be relatively rich, as they already are compared to the absolutely poor.  They have been sold flattened tax rates; they embrace the favourable taxation treatment of their principal dwelling place; etc etc.

We are talking about democracy, here.  Whatever exactly that is and however mass opinion is vulnerable to manipulation by elites of their own kind in the mass media, that means people are entitled to take their own interests as they see them into account and form their own views. But I certainly don’t feel bad about urging the relatively poor of Australia to accept a policy to deal with climate change that would lead to increased energy costs of this magnitude.