Nelson has taken off in another direction on emissions trading schemes again. What Turnbull, Hunt and even Julie Bishop think of this is not known. Certainly Nelson’s new position would have been a surprise to Helen Coonan on Q&A last night. (How excruciating was that?!)
Nelson is now saying that a “cap and trade” emissions trading system may not be the best way and that there are “multiple models out there that should be debated”. Well, at least one - the hybrid scheme proposed by Warwick McKibbin.
It is understood that Dr Nelson is considering the hybrid emissions trading system advocated by Reserve Bank board member Warwick McKibbin, which combines the sale of fixed-price annual emissions permits with long-term permits that can be traded.
This scheme was considered and rejected by the former Howard government, the Rudd Government and its adviser Ross Garnaut on the grounds that it was out of step with international efforts to curb emissions.
Instead, the Government is pressing ahead with plans to introduce a cap-and-trade scheme, under which a cap is put on total emissions, and polluters and non-polluters must trade carbon permits between themselves to meet the target by 2010.
Either Nelson is looking to maximise the difference between the Coalition and the Government while still moving forward on climate change or he has become genuinely convinced of the value of McKibbin’s approach.
It seems that McKibbin believes strongly that the scheme being proposed by Garnaut will fail in the long run and have to be reinvented, so we might as well get it right from the outset.
Garnaut, on the other hand, in his H.W. Arndt Memorial Lecture (pdf) said:
I have considered carefully the proposal of Warwick McKibbin, my long-time friend and ANU colleague, to base a long-term permanent mitigation system on a “hybrid” of an ETS and a price cap. Warwick was a pioneer of serious work on the economics of climate change in Australia. If his proposals for gradual and constrained action had been applied in the late 1990s when first suggested, we would be in a better position today.
The world is now some way down the track on an international system based on emissions reduction targets, starting with developed countries. As discussed in the Interim Report, there are many imperfections in the Kyoto agreement that must be corrected in its successors if there is to be worthwhile progress towards reducing risks of dangerous climate change to acceptable levels. But the focus needs to be on the improvement of the system that has been emerging within the UNFCCC. There is no time to start again. A price cap is not consistent with the emerging international approach.
The idea that a cap could be put on the carbon price, and Australia and the world accept the amount of mitigation that happens to come from that is inconsistent with the urgency of the emissions reduction task. The work of the Review on the reality of the rate of growth in emissions in the Platinum Age has led to realisation that the time available for effective action is considerably shorter than previously assessed. Warwick’s own work, adopting different methods, has arrived at a position on “business as usual” emissions that is as similar to ours as we both are different from the earlier conventional wisdom.
In the context of over-performance on Australia’s Kyoto targets, there is a case for the 2010 ETS to begin with a fixed, low price for permits as a purely transitional measure in the start-up period. For this to work, the period to the end of 2012 would need to be separated from the more demanding mitigation effort from the beginning of 2013.
A fixed, low price would be better than a price cap because the separation from the post-2012 mitigation effort may lead to a zero price under an ETS, that would not allow the building of the ETS institutions and processes. The merits of such an arrangement will be discussed in detail in the Draft Report. (Emphasis added)
Lenore Taylor in the article linked at the beginning of the post says:
Differences over the Coalition’s climate policy are likely to come to a head when the Opposition front bench meets in Canberra on July 29, ahead of a two-day full party meeting on policy.
Meanwhile Burke is pushing for the inclusion of agriculture. David Karoly said the other day that the issue here is not the problem of measuring burping cows. You do that by averaging, the same way you measure anything else. The problem is measuring carbon capture by certain farming techniques. We need both sides of the equation.
Karoly says that Garnaut sees agriculture being included from an early date, perhaps about 2013.
And if you want something else to worry about the CSIRO has released a report suggesting that fuel could be $8 per litre by 2018. If carbon is priced at $40-$100 per tonne this would add a mere 10-25c per litre.
Garnaut said the same thing about agriculture - 2013 or so.
With regards to farting cows, what if somebody breeds a cow that farts less?
RM, with three stomachs instead of four?
Anyone who knows for sure, please set me straight on this, but I think the farting situation and other aspects of calculating the carbon footprint of cattle are derived by looking at an average cow - possibly even an average North American cow.
Grass fed, open range cattle such as in the vast majority of the OZ industry, are WAAAAAY down the low end of the scale. Surprisingly enough, feedlot cattle on a diet for which they are not adapted (corn, fish meal etc) have trouble in their guts.
It’s not the farting, it’s the burping. Part of it is genetics and part of it is diet. See this stuff for an overview of ruminant emissions.
The methane is largely a product of bacterial emission - something that is directly affected by feed conversion efficiency which we know can be improved through breeding and has actually significantly improved since 1990 as a byproduct of breeding faster growing animals. There’s still a lot of methane coming out of the animals, but we know (more or less) how to reduce or offset it, and more interestingly know that within the livestock industry, reducing methane emission has beneficial side effects and is being actively pursued.
(disclaimer: this is my employer)
The other side of the ledger in agriculture comes from the fixing in the soil of a very small percentage of carbon taken out of the air when plants grow. Apparently with certain kinds of pasture you can have a net carbon sink of considerable proportions even while grazing.
I don’t have a link for this. I heard it on RN’s Bush Telegraph where they don’t archive the sound beyond a month. Obviously there are issues about how such carbon capture can be measured.
Another issue is that the carbon balance is substantially different with different kinds of tillage and is affected by temperature.
I think Garnaut’s idea is to put some of the dosh from the ETS into research on these things which Australia has a prime interest in.
The Opposition son’t seem to know if they’re Athur or Martha when it comes to global watming. While they’re in such disarray people will hardly vote for them. So I sort of hope they keep it up. Sort of. A recent item on a poll about emissions trading etc I saw on TV indicated most people thought it should happen, but many freely admitted they didn’t really know what it meant. I only understand as much as I do about it by what I’ve read on LP mostly, and in Socialist Alliance environment policy, + the occasional stuff I get from the Greens. And here’s the rub. Will the Opposition’s inrentional sowing of confusion on the issue make it harder for the ordinary voter to understand? Will this make it more difficult for Rudd to sell? Clearly that’s Nelson’s intention. Yet another unsurprising example of the Coalition putting party interest over national interest.Like the Bourbons they have learnt nothing and forgotten nothing despite their well-deserved electoral defeat.
What Garnaut is saying is that if the world was starting with a blank slate the McKibbin scheme would be the way to go, but going ‘one out’ with it now would massively complicate coordinating our carbon regime with what everyone else is doing. I think he’s probably right.
I don’t think Nelson is the least bit sincere in his advocacy now - he’s just laying a smokescreen to cover a retreat. Dr Nelson and principle are but distant acquaintances.
Lets hope Turnbull challenges soon, he wins, and its followed by solid bipartisan support for the ETS.
Yeah, its almost like the oil market is imposing a carbon tax all by itself. Wouldn’t it be nice if the world was similar short of coal.
Question for all: If a doubling of oil prices in 12 months has resulted in an ever-so-tiny demand response, what would $40/tonne (10c/L) do? Bugger all IMO. Would the demand response for electricity usage be much different at $40/tonne?
Seems to me we are massively underestimating the cost per tonne required to make a significant impact on emissions.
carbonsink, it’s not my area of expertise, but doesn’t $40 per tonne make a whole range of renewables commercially viable?
BTW Bush Telegraph had an extended discussion on the CSIRO report. Well worth a listen when the details go up.
$8 is the worst case, but there was interesting information on biofuels from algae and other stuff.
carbonsink wrote:
That’s the problem of guessing the price of carbon rather than setting a hard benchmark. It’s a pity they won’t set it on the cost of building some kind of carbon scrubber - the price of carbon could then move based on the cost of scrubbing the emission. I suppose a tree or appropriate carbon sequestering forage could substitute, but land use limitations are going to make those ineffective as a global solution.
Well, no doubt you could find seven economists that would tell you that, but what’s the dollars-per-tonne-of-CO2 equivalent to the recent run up in oil prices? $100/tonne? $200/tonne? If so, where are the renewable alternatives? The biofuels, the hydrogen fuel cell cars, the solar-powered electric vehicles? Sure, they may come eventually, but in the short-term the only option is to conserve, and I can’t see much conservation happening at $40/tonne.
It’s a fair point, but probably needs to be seen in a wider context. If the average punter is faced with these rises in all the household costs - petrol, power, food, insurance, etc. its got to start biting eventually, particularly if interest rates stay high. This pressure to change lifestyle choices could, of course, be undone if the compensation Garnaut talks about is too generous too far up the scale (thank God those middle-class welfare loving guys, Howard & Costello, are gone!)
btw, how is ‘green’ power going to be treated under an ETS? Is it going to be possible for people to choose wind power at around 20c/kwh they get now while the Yallourn coal-fired stuff starts to retail at 35c/kwh? People don’t have to change their demand here - the dirty options just get priced out.
In regards to methane burping cows, there’s another method that has been toted to reduce emissions: http://www.newscientist.com/article/mg17423472.400-no-burps-please.html (subscription required)
Basically, the idea is to innoculate ruminants’ stomachs with bacteria from kangaroos’ stomachs, which don’t produce methane.
Personally, I think we should just farm and eat kangaroos instead of beef.
Carbonsink: as has been discussed many a time, long-term and short-term responses to price signals are two different things, and transport - particularly personal transport - is probably going to be one of the last sectors to be decarbonized.
Andos said:
Not enough meat on them and they can’t produce it fast enough. We’ve been breeding cows for millennia for high production, but Kangaroos have largely been breeding themselves to run the hell away from spears and live on poor pasture and little water. From the above link:
carbonsink: your right there hasnt been that much of a demand reaction in australia over the last year but I’d argue that thats in the short term. You’ve just got to look at the collapse of SUV sales in the USA and the decreased petrol consumption in britain where theres an actual public transport alternative to see that people do respond.
They’ll simply use public transport where they can and buy more fuel efficient cars. I’d suggest that Australia will start to react as well over the coming months and years.
(sorry about links I couldnt work out how to link in paragraph)
[I put the links in Stuart - Brian]
New Government, new Opposition and early days. I think what Nelson is doing is creating an air of difference about which he can at least have a microphone in his face, while trying to plough up as much of the ground the Rudd Government has secured recently. Whether he is committed one way or another is very hard to tell, other than he’s committed to flexibility.
But that’s just the stuff for public consumption. This is really about internal struggles and party leadership. Does the Coalition go populist or does it go stronger? Each direction has roots back in cHoward so the background on it doesn’t help, rather, with Nelson going this way, loyalties from then are placed in conflict between one another and very possibly within the person. Added to that are things like Nelson’s poor standing, Turnbull’s style, other hopeful contenders, and the general developments on CC which are leaving the Coalition behind.
If July 29 kicks off a showdown, the question then is will a leadership resolution come about, or are these conflicts too deep to resolve now. Bearing in mind also that CC hasn’t bitten enough within the public to demand a change of leadership on it just now, making the whole thing all about the Liberal Party, which is a poor look and crook framework to present a resolution whichever way it comes even if there is one.
And a leadership spill would require the contender to want to move, which is not a given just now. If the fractures on this policy are in fact deep within the party, it could result in Nelson plodding on while time can be given to getting sorted.
Musing, if any of that is so then there’ll either be more muddling, or if Turnbull goes, he’ll be going hard, with a head full of steam to get the party on track.
Why would transporation be the last sector to decarbonise when that is the sector experiencing the massive price shock right now (and according to the CSIRO, likely to continue) while electricity generation may or may not get a very small price nudge circa 2012, depending on the results of various green papers, white papers, political deal-making, and international negotiations?
I agree with you of course, but the only answer I have is oil is so damn hard to substitute. What’s yours?
Because we’ve known for a long time that there are a lot more options for stationary energy - renewables, nuclear, swapping coal for gas - than for transport. Furthermore, from the end-user perspective, a kilowatt-hour of renewables is indistinguishable from a kilowatt-hour of coal-fired electricity. That’s not true for transport.
Which is another way of saying, oil is so damn hard to substitute. Stationary energy is easier to substitute, not easy by any means, but easier.
I still can’t see there being much demand response at $40/tonne. What does that translate to in terms of retail electricity bills? If its in the order of 10-20% nothing will change because most households couldn’t tell you what their last electricity bill was anyway.
The real fun and games will happen when the cap is reduced. Lets hope the government doesn’t give the generators and easy out, like planting trees in Indonesia or PNG.
Now lets see; the cow eats grass, the grass contains carbon, the carbon comes from carbon dioxide, the carbon dioxide comes from the air.
The cow burps and puts some of the carbon back in the air as methane. The rest goes into building a cow. Fred eats the cow, grows breaths and shits. Some carbon in the air, some down the sewer.
Net result about zero; a little plus because carbon dioxide isn’t quite as bad a greenhouse gas as methane.
The problem is releasing carbon locked up millions of years ago; not todays carbon cycle. Next we will have people suggest we go around shooting kangaroos for carbon credits.
If your going to discount the carbon locked up when the grass grew, then no use talking about fuels based on growing stuff as a solution for the future.
Just saw Nelson on Sky News saying he backs a cap and trade system.
Speers said its likely he got scared of Turnbull making a run and back down. I think its an indication the skeptics don’t have the numbers in the Liberal party room after all. At least no the ones who are willing to risk an election on skepticism.
Just some thoughts on Kangaroo v Cattle.
At this stage we have not “encouraged” Kangaroo production so with this numbers could be increased further. Will per capita meat consumption decrease - possibly
All up Kangaroo consumption is increasing in Australia basically on its health benefits alone which are quite substantial ( shown to treat heart disease and type 2 diabetes )the impact of monitoring greenhouse output will further increase its consumption leading Kangaroo meat to be a common meat on our tables in the next 5 - 10 years.
One interesting point. The Kangaroo you buy in Coles and Woolworths is packed in CO2 ( ironic ) in Qld we have to go local butchers and independent supermarkets to buy Naturoo as this is vacuum packed not modified atmosphere packed in CO2
I, for one, will welcome our cow sized Kangaroo overlords.
Seriously, you can’t herd them at the size they are, re-breeding mega-fauna (entirely possible) may not be the best solution if you can’t also control their flighty nature. While some work has been done on sheep for behaviour, not nearly enough has been done to reliably breed for it. You’d be on a 50 year hiding to nothing before even making a dent in it.
“Speers said its likely he got scared of Turnbull making a run and back down.”
Nice work there, Stephen Lloyd.
Mmmm , maybe Nelson is moving closer to a greeny inspired, waterloo.
Over to you Brian….
One way or another the LN/P will sign up to an ETS scheme. The general populace is forcing both major parties to converge towards a kind of rational populism, as per my Great Convergence theory.
The general populace is in favour of doing something serious policy wise about climate change. So the LN/P will fall into linee ALP on an ETS, just as the ALP fell into line with LN/P on the GTS.
So I predict that the LN/P will largely follow Turnbull-Howard ecology policy in accepting an ETS. Although it may dabble in Nelson style petrol price political whingeing.
To reinforce the psephological message: ecological sustainability policy is no different politically from national security, cultural identity, financial prosperity and social equity policies. Both parties face massive centripetal forces pushing them to converge on the populist Centrist policies.
I also predict that the ETS (where T = tarriff for trading or taxing) will set a carbon tariff that is fairly low. That is where the general populace will want it kept once it becomes obvious that the world has passed the ecologic and economic tipping points.
It appears that over the “tennies” the major carbon emitters - USA, PRC & IND - will not be making serious efforts to retool their energy infrastructure. According to Hansen it follows that the Antarctic and Greenland ice sheets probably start to melt sometime during the twenties.
The polity will produce an ETS because the populace wants one. But the populace does not want an effective ETS ie one that reduces carbon emmissions to mid 20thC levels because the populace does not want to suffer a reduction in living standards to mid 20thC levels.
Particularly when it becomes apparent that nothing we do can forestall the headlong plunge into ecological meltdown.
The Antarctic and Greenland ice sheets will probably melt over the next 50 years.
Jack — if by GTS you mean GST, then the ALP didn’t support the legislation.
A price on carbon will help shift electricity production towards alternative energy, but it will do little to change the transport sector. That’s not so bad. The primary issues to address are (1) land clearing; and (2) “dirty” coal.
That’s why I don’t think you should be worried about applying the price rise to petrol. If you increased the price of carbon-electricity but decreased the price of petrol… that would be tackling the big problem. The size of the petrol tax is not a major issue.
But this issue is 90% politics now… with only a smattering of policy thrown in for good measure.
26 jack strocchi Jul 11th, 2008 at 11:03 pm boldly predicts:
The Strocchiverse, aspect Brendan Nelson, conveniently accommodates:
I am going to count that as a successful confirmation of my party-psephological model. I make a point of deriving testable implications for any theory applied to real world real time events.
I suggest that the La Pros could improve their intellectual signal-to-ideological noise ratio by imbedding their specific ideas within a more general theory, and then subjecting various aspects of that model to constant predictive testing.
I make no special claims to know about the genuine policy-ideological preferences for LN/P politicians. No doubt they are insincere.
But then how sincere are Rudd, Garrett Wong etc about curbing AUS’s carbon emmissions when they are signing off on 300,000+ immigrant increase in new carbon emitters for 2008-09? And supporting Costa’s private brown coal power generation plays?
jack, as far as I can see you had a 1 in 2 chance of being right. So congratulations!
Which intellectual discipline do you base your theories on? Is it sociology, politics, psychology or a discipline only known in the Strocchiverse? Perhaps you can run seminars for the pundits to improve their intellectual perspicacity.
On the 300K migrants, in the long run Australia has probably the best prospects of renewable energy resources in the known world. Provided that we can fees them and give them something to drink we should be processing minerals here eg. aluminium and steel-making. We should even be developing a major manufacturing industry for the sake of the planet!
29 Brian jul 13th, 2008 at 9:43 am
Actually, one in three. You are forgetting the fence-sitting option so beloved of the crafty politician.
Ive made a large number of pseph calls over the naughties. All of which have been “on the money”. (whats your score, Brian?) So it cant be just dumb luck.
I am trying to egg or goad pundits into “keeping score” so that we actually build intellectually progressive models. The Oz-pap v Oz-blog Commentary Wars were depressing. The pundits invariably sound like re-hashed versions of student campus paper editorials c1983. Post-facto ideological spin rather than pre-facto psephological science.
The pseph bloggers are an encouraging sign. IF anything they are too empirical. Not enough general theory or local knowledge to guide them. So their scoring record is not as good as it could be.
Brian says:
In general I use the basic method of empirical scientific model building - general theoretical, local empitical leading to confirmation/contradiction and correction.
In pseph blogging I use the standard post-war behavioural political science. This is based on marrying the economic model of political structure (Schumpeter, Downs) with the sociological model of civic culture (Bell, Lipset). The post war US model of party behaviour seems to be getting more and more relevant to AUS now that we are in a more or less post-ideological age of mass political apathy and party convergence.
AUS politics is becoming extremely boring, mostly due to the petering off of the post-seventies convulsion of right-wing and left-wing liberal reformism. Howard’s Work Choices was the last of that push to fall by the wayside.
The Greens are, as per One Nation, a minor party exception that proves the rule. The major parties will co-opt their sensible policies, thereby marginalising them. The melting polar ice caps seem to have been their Tampa.
29 Brian Jul 13th, 2008 at 9:43 am says:
This kind of jaunty talk about blue skies and greener pastures is more suited to naive economic booseers on the Right. Reminds me of Steve Martin joke about how you too can earn a million dollars and pay no tax. “First…earn the million dollars…”
You are saying that bringing in 300,000+ (why not 3,000,0000+?) poses no real problem to organising a carbon-neutral economic boom.
All we have to do is convert all our cheap coal power generating facilities to expensive renewables. Then we just find a whole bunch of extra potable water and arable land so that “we can feed them and give them something to drink”. Then we radically transform our industrial base from mineral extraction to “processing minerals here”.
I guess by that time, given our unlimited supply of cheap labour and the unlimited access to renewable energy, it is really a no-brainer for us to become “a major manufacturing industry for the sake of the planet!”. Those Chinese better watch out, their mineral processing days are numbered.
This is just fantasy island stuff.
The application of the precautionary principle implies that first, one should do no harm. That means stop digging the hole we are in. Which pretty much describes our current crisis in local geographical logistics and global ecological economics. Significantly driven by massive immigration flows.
But dont expect Greenies to mention this aspect of the Climate Wars. That would mean giving up some of their cherished hopes about rainbow diversity coalitions and the like.
Have Greenies (or Brownie for that matter) stopped to wonder how the civil culture will cope with a massive influx of diverse immigrants suddenly facing an ecologically-driven end to the money-go-round? I know it is impolitic to mention such things.
But my street-level observation already registers alot of social tension along those lines. Hence the Vic Govts out of the blue “diversity” campaign. Their polls are probably revealing some politically incorrect feelings out there in McMansion land.
Oh well, never mind, liberals will continue to whistle past the ideological graveyard. And then spend the rest of history composing apologies on behalf of long-dead ancestors.
There you go. Brendan Nelson and Climate Change.
Good one, Robert. Jack I’d like to leave the immigration debate aside completely and merely point out that at some future time when the world sees that building coal-fired power stations is not a good thing the world might apply its collective mind to how and where certain things can be done to minimise CO2 emissions. The world might decide that it’s silly to export iron ore and cart it in ships around the world when it could be processed here.
Of course the notion of “the world” deciding rationally anything in the public interest is a bit of a stretch. But the market might allow it to happen anyway.
The ultimate purpose of emissions trading is to price CO2 producing operations out of business. When this happens (if it doesn’t we’re stuffed) then Australia should have a natural advantage by having virtually unlimited renewable energy. So the market might make us the most competitive place to do certain things that require lots of energy.
Whether we rise to the opportunity and where we get the labour and skills is another matter.
33 Brian Jul 13th, 2008 at 10:52 pm
I bet you would. How easy it is to say “No carbon extensivity from more immigrants to see here. Just keep movin’ folks.” But dont think I am going to let you off the hook that easily.
AUS now has to meet some Kyoto-stipulated carbon emissions cap by 2012, arbitrarily selected from a base year of 1990. There are two ways of achieving it. One is to constrain the quantity of carbon emissions per person going out. The other is to constrain the quantity of carbon-emitting persons coming in.
Using only the first method is economicly painful but politically correct. Using only the second method is ecnomicly painless but politically incorrect. Personally I think we should go both ways, starting with the second as it is easy and simple to just say no more.
To give an idea of the magnitude of immigration on the carbon economy one only has to look at AUS recent population growth. In 1997 our pop was 18m. In 2007 it had climbed to 21m. Thats a 16% popn increase in 10 yrs. Probably 2/3 of which (10&) was immigration-induced.
So if we had decided to go for no net immigrants over the past decade we would have a pop of about 19m. Our pop would have been 10% smaller.
Over that decade we overshot our (non-land clearance related) Kyoto carbon emissions target by 25%. Given the relatively high carbon-intensity of immigrants (who have to form complete households from scratch) it is likely that we could have wiped off half our carbon overshoot with a zero net-immigration goal. (Simply aiming to replace high-IQ emigrants with high-IQ immigrants.)
With a moderate ETS, conservation and other clean energy projects we probably could have knocked off the other half. Without nearly as much economic pain or political conflict.
To arbitrarily place a taboo on one set of terms in the carbon conservation equation is intellectually dishonest and ideologically pernicious. But Greenies are willing to do that because absolutely nothing must be put in the way of their cherished (de)form of liberalism.
33 Brian Jul 13th, 2008 at 10:52 pm
What is your source for the fabled claim that AUS has “virtually unlimited renewable energy”? Is this just because the sun shines alot in the desert? Or that the wind blows freely accross the plain. I rather think you are underestimating the amount of sun that shines and wind that blows in other jurisdictions.
In any case, hydro power is the most popular and cheapest form of renewable energy this country has ever had. Dogmaticly opposed by Greenies when and whereever possible. It dwarfs the other forms of renewable energy.
But of course hydro is off the agenda. As is nuclear power. And immigration. How convenient for someone whose ideology was forged in the seventies.
Jack, I’ve seen a map of the world indicating what is considered prime solar territory. Almost the entire Australian continent is so considered. That’s concentrated solar, which requires direct sunlight.
Then there is the vast geothermal resources, I think the best in the world.
That’s without considering wave power or tidal energy.
All this has come up previously and frankly I’m too tired to dig out more specific detail now.
Concerning what you wrote about immigration I didn’t want to get into that on this thread. Tomorrow some time I’ll read it to see whether it’s relevant and/or brings something new to the table. If it doesn’t appear you’ll know where it’s gone.
“In any case, hydro power is the most popular and cheapest form of renewable energy this country has ever had. Dogmaticly opposed by Greenies when and whereever possible.”
Jack could I suggest you take a look up the Snowy Mountains some time to see the effect of hydro generated electricity on the river systems.