Editorials
Social determinants of health
Volume 195 - Issue 6

Carbon pricing is a health protection policy

Authors:  Philippa L Howden-Chapman, Ralph B Chapman, Anthony G Capon and Nick Wilson

Med J Aust 2011; 195 (6): 311-312. || doi: 10.5694/mja11.10871
Published online: 19 September 2011
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A carbon price is vital for the public good; complementary policies should protect low-income households

Anticipating the Australian Government’s announcement of a carbon tax, the Royal Australasian College of Physicians (RACP) stated that, while it accepted the need to take action on climate change, it recommended caution about a carbon tax because it could exacerbate health inequalities.1 Some in the media inferred that the RACP’s primary concern was the potentially negative health impact of a carbon tax.2

It is reasonable for health professionals to be concerned about the welfare of low-income households, because people in these households usually spend a disproportionate share of their income on energy and food. However, the larger policy issue is the incontrovertible evidence that climate change is occurring3 and will have profoundly negative health impacts.4,5 A longer lens tells us that a carbon price is especially in the interests of those with low incomes, whose lives will be more disrupted by climate change than will the lives of the wealthy, and among whom the negative health impacts will be greater.6

If the level of global warming is to be constrained below 2°C, all countries must take extraordinary policy actions. This temperature increase is the optimistic “guardrail” beyond which we are unlikely to be able to maintain the climatic stability on which our current civilisation depends. It is far from clear that we have the global geopolitical will to prevent warming in excess of this 2°C level. Because climate change is occurring at the same time as we have passed the peak of conventional oil supplies,7 and unconventional methods of oil extraction involve even more greenhouse gas emissions, all developed countries must now take urgent and effective policy action on climate change to protect human health and planetary ecosystems.

Taxation is one of the most powerful policy tools avail-able to governments, but it is also one of the most politically controversial. Individuals who pay a particular tax are not necessarily those who will benefit from the revenue raised. Carbon taxes and other environmental taxes cannot be seen in isolation; such taxes should be judged by their overall distributional effect, as the revenues are disbursed through transfers or government expenditure.

Putting a price on carbon will inevitably cause increases in energy prices, and failing to compensate low-income households for these increasing costs would be regressive and could lead to low-income households having to make unhealthy choices about whether “to heat or to eat”. However, governments with a clear strategic intent to reduce health inequalities have many policies available to ensure that their overall policy package is progressive, as well as effective in cutting emissions. At the same time as the Australian Government announced the carbon tax, they announced other tax changes, with more than half the money raised by the carbon tax to be redistributed to households by way of tax cuts and increases in pensions, allowances and family payments.

The taxation, benefit and expenditure arrangements in developed economies constitute an integrated system, and the outcomes of any policies should be assessed by effects on overall measures of income and wealth distribution. For example, the roll-out of the United Kingdom’s Decent Homes Programme — requiring homeowners and landlords to bring their houses up to a decent standard — has made a positive contribution to lowering energy costs for low-income households.8 Similarly, American research has shown that home energy assistance programs for low-income households can reduce nutritional and health risks among children under 3 years of age.9 In New Zealand, in contrast to the recent Australian housing insulation debacle, successive governments have subsidised insulation and more effective, non-polluting heaters. This popular policy was based on evidence that these measures increased the energy efficiency of houses and lowered the household’s energy expenditure.10,11 There were also broader social and health benefits that outweighed the costs of subsidising these programs by local and national governments.12

These are all examples of policies that have required increased initial expenditure — in some cases by both households and governments — for medium- and long-term broad benefits. They are policies that balance targeting and universalism, and are appropriately proportionate to need.

Putting a price on carbon, via a tax or other means, likewise enables societies to manage their carbon emissions more efficiently, creating incentives to reduce emissions where it is easiest to do so. The Intergovernmental Panel on Climate Change concluded that the greatest sectoral emission reductions can be made in the buildings sector.13 The World Health Organization has recently published a report highlighting that while there are inevitably costs involved in reducing carbon emissions in buildings and in household use of energy, the co-benefits for health are significant, particularly for low-income households.14

Health sector organisations should support putting a price on carbon and should take care with their media releases, lest any statements be taken out of context and misused by opponents of carbon pricing. These organisations need to highlight the potential health benefits of public policies15 while monitoring policy packages to ensure that, overall, they reduce inequalities in income and health.

Authors

  • Philippa L Howden-Chapman MA, DipClinPsych, PhD1
  • Ralph B Chapman BE, MPA, PhD2
  • Anthony G Capon MB BS, PhD, FAFPHM3
  • Nick Wilson MB ChB, DIH, MPH1
  • 1. University of Otago, Wellington, New Zealand.
  • 2. School of Geography, Environment and Earth Sciences, Victoria University of Wellington, Wellington, New Zealand.
  • 3. National Centre for Epidemiology and Population Health, Australian National University, Canberra, ACT.

Correspondence: philippa.howden-chapman@otago.ac.nz

Competing interests

Anthony Capon resigned as chair of the RACP climate change working group on 18 May 2011.

References

Provenance: Not commissioned; externally peer reviewed.

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