First Continent to Raise a Tax to Cover the Costs of Climate Change

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Australia’s new Prime Minister Julia Gillard has just levied a tax to pay for the catastrophic flooding of the last two months that drowned areas larger than France and Germany combined.

The Australian floods temporarily shut the coal mines that are most responsible for climate change but they also washed away the rail lines to carry that coal to market, and damaged bridges and roads and destroyed thousands of buildings across three major states. Total damage is estimated at over $10 billion.

The Australian government itself faces another $5.6 billion in flood costs. Gillard’s new tax will run for two years and flood victims are exempted.

The tax brings up the question: just how are nations in the future going to pay for the increase in frequency of catastrophic damage as the result of climate collapse?

Australia seems to be about a decade ahead of this continent in the effects of climate change. It has already had 14 years of drought, with state-wide wildfires as a result, followed now by monsoon-like rains, which began unpredictably in what used to be the dryer season this year.

But these kinds of climate disasters are in our future too. These are exactly the kinds of events that climate scientists (from James Hansen in the early eighties on) have been saying will become more common here too, as carbon dioxide levels rise.

How are we going to pay for the damage from an increasing number of droughts, wildfires, floods, hurricanes and below-zero blizzards due to Arctic melt, all the result of climate change?

Insurers are getting increasingly skittish about the odds. The insurance industry relies on predictable risk levels.

Florida coastal property insurance costs are already up 6-fold. After Britain’s 1,000 year floods, the Association of British Insurers has suggested that property insurance may not even be available in the future.

In the past, America has had a more public-spirited consensus on sharing the burden of disaster costs, and FEMA helped. But FEMA could be quickly overwhelmed by the scale of events towards the end of this century. In the face of survival, public generosity seems to be strained to breaking point.

Indeed, as if to head off such a responsibility in the future, already Republican Senator Mike Lee has just called for the end of FEMA.

Under the GOP plan, states would be on their own to fend for themselves in disasters like Katrina and and the 500-year Iowa floods that drowned Cedar Rapids in the record breaking Great Flood of 2008 and again in 2010.

The GOP Senator said that FEMA is not in the Constitution, so it must be dismantled. But money must come from somewhere in a crisis.

History will show that Republicans and their Astroturf sub-party the Tea Party, both in the pay of the fossil energy industry, actively caused climate collapse, by preventing policies that grow clean energy to prevent it.

But, it seems that now they do not want pay for it. It will be costly. Someone will have to pay. Australia is the first government to retroactively raise a tax, on everyone, to cover the costs of just one year’s event. But there will be more years like this.

We are entering interesting times.

Image: London, from Postcards From The Future

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