Monday, 24 November 2014

The hard truth about fuel excise

Although it is news to me that proposals to re-index fuel excise in Australia have been made and – remarkably due to the dilly-dallying of the Greens – failed, my discovery that evening has made me wish to look at how absurd in ecological terms Australia’s extremely low and declining (in real value) fuel excise is.

Although in the real world fuel excise pays for road upkeep and not environmental services, my opinion is that fuel excise is legitimate if and only if it pays for ecological services that a free market cannot, whether conservation reserves or mass transit projects. Thus a country’s legitimate level and quantity of fuel excise can be determined by the amount of land it needs conserved, but which a free market cannot protect from ecologically destructive development.

To determine the area of land requiring conservation, but un-conservable under a free market, one needs to subtract successively from a country’s land area:
  1. land whose flora and fauna is younger than 15,000 years due to glaciation and hence completely lacks unique species or refuges therefor
  2. land over the slope limit for efficient arable farming of 11 degrees
  3. land which can support low-input agriculture – defined as agriculture without phosphatic and chalcophile element fertilisers or artificial river impoundments
(It is important that if a point of land meets more than one of those categories, it be counted only once).

If we follow those criteria, we find that Australia’s land almost never meets any of the three criteria that deem conservation unnecessary. The only soils in Australia capable of anything approaching “low-input” agriculture – the cracking clays of the Darling and Cooper basins within a crescent approximately from Singleton to Birdsville – are too heavy plow without heavy machinery. Not to mention that most of this region has much too erratic a rainfall for rainfed farming and no truly permanent water sources, which is unlike other areas with similarly erratic rainfall in, say, Central Chile or northwest India or California.

The proportion of Australia’s land under 11˚ slope, as can be seen here, is easily the highest of the world’s larger nations – in fact the proportion of land of very low slope that Australia has is exceptionally high and not exceeded even by small nation-states.

Thirdly, virtually none of Australia’s land was glaciated during the Quaternary, whereas Canada and many European nations (approximately those north of a line from the Severn to the Rhine to the southern border of Poland to the Gulf of Anabar) were entirely glaciated for most of the Quaternary and have been habitable for only brief periods.

If we combine these three, we see that Australia has over seven million square kilometres (well over 90 percent of its land surface) needing conservation but not conservable in a free market. In contrast, all the other OECD nations combined possess only very small areas that fail all three tests above – highly leached land in the American South and a few sandplains in California, France and Portugal. These could not total more than about ten thousand square kilometres or 0.1 percent the total area of “valuable but economically unconservable” land in Australia.

From this simple if unrefined and imperfectly measured logic, it follows that Australian fuel excise should by ecological criteria total well over ninety-nine percent the total fuel excise of all OECD nations, measured as a percent of the total fuel excise paid buying one litre of fuel in each OECD nation. This is especially true if one takes into account potentially high conservation costs for example in controlling pests like the cane toad and rubber vine, over remote areas. The fact that actual Australian fuel excise is not 99%, but nearer 1% of the OECD total says much about the influence of the car and energy industries in Australia, as well as our family- and community-oriented “car culture”.

This does not in any way diminish the fact that a situation where Australia pays a fraction the fuel excise of many entirely-glaciated nations with no land requiring uneconomic conservation should not be accepted, nor that improvement as inadequate as increasing Australian excise from 25 percent to 50 percent the OECD mean would do nothing to help. History shows that even modestly and inadequately less cheap petrol (say down from 800 millilitres/$ to 600 millilitres/$) produces major effects on motoring habits – so what would a realistic cheapness of under 30 millilitres/$ achieve?? Fuel efficiency would increase spectacularly but resources to pay for the global costs of the vast quantity of greenhouse pollution Australia and its minerals produce would nonetheless become much greater. Moreover, Australia’s land supply is so abundant that such fuel taxes would not affect – especially if development regulations were simplified – family formation so much as lower taxes in the Enriched World do.

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