In the lead-up to World Environment Day on Tuesday 5 June, agricultural economist Professor Kevin Parton of Charles Sturt University believes that there is a need to get the correct prices for natural resources such as water or greenhouse gases.

 

“It doesn’t matter which party wins the next election, the time to start carbon taxes or a water permit system is now if we are going to affect climate change and solve the water crisis,” Professor Parton says.

 

“Two big issues that have pricing problems right now are water and greenhouse gas emissions,” said Professor Parton. “The good ‘water’ is under-priced, and the bad ‘emissions of greenhouse gases’ is allowed to occur at too low a price.

 

“Consequently, we have a shortage of the first and an oversupply of the second. In both cases trading schemes have been proposed to get the prices right.”

 

Contrary to popular opinion, Australia can achieve significant greenhouse gas reduction targets at apparently small cost. According to recent research (Hatfield-Dodds and Adams 2007), Australians can be considerably much better off in the year 2050 and, at the same time, make deep cuts in greenhouse gas emissions but, according to Professor Parton, government policy needs to change to achieve this, and fast.

 

“How is this achieved? First, by taxing or selling permits to polluters. This will reduce greenhouse gas emissions. Second, the proceeds of this pollution tax could then be used to finance a reduction in personal income and company taxation. This would sustain economic growth, and the less well off can be compensated for effects like higher electricity prices. In addition, some of the proceeds of the tax could be targeted at developing cleaner technology.”

 

“On the question of water, something seems to be out of line when price of water to irrigators is $60 per megalitre while households can pay up to $1400 per megalitre.

 

“It’s all about getting the prices right,” Professor Parton says. “The historical problem is that water is too cheap. Consequently, we’ve seen masses of water used for farming - ten times that for domestic use.”

 

Professor Parton emphasises that he’s a great supporter of the agricultural industry which is why he wants to see change. “There needs to be more sustainable use of water for irrigators, or they risk having none in the future.”

 

So as politicians fight over power of the country, Professor Parton’s concern for the country’s water and power supply continues.