The Australian

Australia will suffer if fossil fuel use continues unabated. Climate extremes will increase. Poleward expansion of the subtropics will make Australia often hotter and drier, with stronger droughts and hotter fires, as the jet stream retreats southward.

But when ocean temperature patterns bring rain, the warmer air will dump much more water, causing damaging floods. Storms will become more devastating as the ice sheets on Antarctica and Greenland begin to disintegrate and cool the neighbouring ocean, as I describe in [my book] Storms of My Grandchildren. Ice discharge from Antarctica has already doubled in the past five years.

Science has shown that preservation of stable climate and the remarkable life that our planet harbours require a rapid slowdown of fossil fuel emissions. Atmospheric carbon dioxide, now almost 390 parts per million, must be brought back to 350ppm or less. That is possible, with actions that make sense for other reasons.

But the actions require a change to business-as-usual. Change is opposed by those profiting from our fossil-fuel addiction. Change will happen only with courageous political leadership.

Leaders must draw attention to the moral imperative. We cannot pretend that we do not understand the consequences for our children and grandchildren. We cannot leave them with a situation spiralling out of their control. We must set a new course.

Yet what course is proposed? Hokey cap-and-trade with offsets, aka an emissions trading scheme. Scheme is the right word, a scheme to continue business-as-usual behind a fig leaf.

The Kyoto Protocol was a cap-and-trade approach. Global emissions shot up faster than ever after its adoption. It is impossible to cap all emissions as long as fossil fuels are the cheapest energy.

There is zero chance India and China will accept a cap. And why should they? Their emissions, on a per capita basis, are 10 times less than those of Australia or the US.

Fossil fuels are not really the cheapest energy. They are cheap because they are subsidised, because they do not pay for damage they cause to human health via air and water pollution, nor their environmental damage and horrendous consequences for posterity.

An honest effective approach to energy and climate must place a steadily rising price on carbon emissions. It can only be effective if it is a simple flat fee on all carbon fuels, collected from fossil fuel companies on the first sale, at the mine, wellhead or port of entry.

The fee will cause energy costs to rise, for fossil fuels, not all energies. The public will allow this fee to rise to the levels needed only if the money collected is given to the public. They will need the money to adapt their lifestyles and reduce their carbon footprint. The money, all of it, should be given as a monthly "green cheque" and possibly in part as an income-tax reduction. Each legal adult resident would get an equal share, easily delivered electronically to bank accounts or debit cards, with half a share for children up to two children per family.

Sure, some people may waste their green cheque on booze or babes. Such people will soon be paying more in increased energy prices than they get in their green cheque. Others will make changes to keep their added energy cost low, coming out ahead.

There will be strong economic incentive for businesses to find products that help consumers reduce fossil fuel use. Every activity that uses energy will be affected. Agricultural products from nearby fields will be favoured, for example, as opposed to food flown in from half way around the world. Changes will happen as people compare the price tags.

The rising price on carbon will spur energy efficiency, renewable energy, nuclear power, all sources that produce little or no carbon dioxide. Bellyaching howls from coal moguls must be ignored. Let them invest their money in renewable energies and nuclear power.

Australia is blessed with abundant nuclear fuel as well as coal. Nuclear power plants are the ideal base-load power for Australia; their excess power in off-peak hours can be used to desalinate water. Power stations can be sited near coastlines, where cooling water is plentiful.

But all potential energy sources must compete, with each other and with energy efficiency. If renewable energies can do the whole job economically, as some people argue, that would be great. Put a price on carbon and let all parts of the private sector compete.

Fee-and-green-cheque is simple, designed to do an honest job. Emissions trading, in contrast, is designed by big banks that expect to make billions out of the carbon market. That means out of your pocket; every dollar will come via increased energy prices to the consumer, with no green cheque to soften the blow.

I mentioned that cap-and-trade will never be accepted by developing countries. But why would China accept a carbon price? China does not want to become a fossil fuel addict, with the requirement of protecting a global supply line. It wants to clean up its atmosphere and water. It is investing as fast as its can in wind and solar energy and nuclear power.

China knows that these clean energies will boom only if they put a rising price on carbon. It seemed willing to negotiate that approach in Copenhagen, but was handed a cap-and-trade edict. Results were predictable.

What the world needs is a nation that will set an example, stop pandering to special interests, do what is necessary for the people and the rest of the life on the planet. It is a moral issue. We cannot turn our backs on our children and grandchildren. Is it possible that Australia could provide that example, that moral leadership?

James Hansen is director of the NASA Goddard Institute for Space Studies. He is a guest of the University of Sydney and Intelligence Squared Australia and will speak at the Adelaide Convention Centre tonight.