I awoke to Fran Kelly struggling to elicit Richard Denniss’ point about an emissions cap acting as an implicit floor this morning. (Update: TAI Report) Even asking him the same set of questions twice didn’t seem to help. You need to unpack the underlying assumptions of the debate as it’s being conducted in Australia over to understand the beauty of The Australia Institute’s formulation.
The line I repeatedly hear from economists is that behaviour can only be modified by getting incentives right. Whether we’re talking about businesses, politicians or Grandma the answer is the same: with the right assumptions (perfect competition, access to information), you only need to structure the incentives correctly and you get an optimal outcome. Adam Curtis has documented the roots of the calculating, autistic homo economicus in Cold War game theoretic logic with great force.
The Australia Institute knows this history and its permeation into the logic of business all too well. Denniss merely extrapolates these assumptions to the public writ large. This phantom public, it is assumed:
- act rationally: they will not change their behaviour without appropriate monetary incentives in place.
- have (more or less) perfect access to information: they know the supply and demand of emissions permits
Joshua Gans operates from the same assumptions, but arrives at a different conclusion:
The only behaviour we could possibly be worried here is environmentally conscious consumers as others don’t currently have an incentive to save. Currently, when those consumers reduce emissions that helps the environment. After the ETS, if they want, consumers could say, consume less electricity, buy emissions permits with the saved money (now more because of the ETS) and tear them up. How exactly is that not better?
The Australia Institute is coming up with some hypothetical scenario that requires environmentally conscious consumers to avoid buying permits. Why should that happen? Indeed, with the ETS, they can buy permits and not actually reduce their consumption. Surely that will increase the supply of environmentally conscious behaviour?
There are two problems main with this. The first is that price is, historically, a poor explanation of environmentally conscious behaviour. If economists were more willing to get their hands dirty and engage with the social logic of consumption a little more, we might be able to get beyond a debate that operates with such loony formalisms. Denniss’ suggestion that caps act as implicit floors takes the pervasion of neoliberalism (or economic liberalism if you prefer) at face value. This also shows up their limits, begging the question of where the line between ’social/environmental’ and ‘economic’ should stand.
The second related problem is that buying up emissions permits will not just be a sign of ‘environmentally conscious behaviour’ as in the dream world of economists, but will also be a declaration of war on the coal-eating surrender monkey business lobby. As the Climate Institute notes, the unwillingness of business leaders to speak out on appropriate caps whilst accepting the science is the most insidious form of denialism.
Individuals buy emissions offsets – which are roughly the equivalent of buying ETS permits and tearing them up – all the time. So do many businesses. Given that ETS permits will avoid the major problem with offsets – do you actually trust that your money results in emissions reductions – I don’t see why this won’t occur with permits.
Secondly, your contention that price “is a poor explanation of environmentally conscious behaviour” is not supported by, say, fuel consumption patterns in the United States and in the EU. Or the profusion of solar panels in Germany, insane as that policy is. Or the recent death of the SUV market in the USA when gas prices soared.
No, we’re not homo economicus, but there’s plenty of evidence that price can and does make a big difference in what we choose to spend our money on.
Finally, I’m not quite understanding your point about “declaring war” on the coal-eating surrender monkeys. Isn’t that precisely what we need to do?
The second area I suppose where I disagree is the converse approach – that if you involve people in the process and tell them what wonderful things they’re doing for the planet if they act in more environmentally desirable ways, they’ll make substantial sacrifices to do so.
The evidence for that is pretty dubious, I’m afraid.
dk.au and Robert
Price is certainly important: look at the sudden rise in train commuting in Melb, early ‘08 when petrol prices rose sharply, as another example. But presumably Australian Govts are not planning to “use price signals” ALONE?
Surely there’ll be other components of policy? Research incentives, govt purchasing, infrastructure investment; persuasion, education, restrictions (similar to water use restrictiuons now in force)?
It’s hard to tell whether what Richard Denniss says it wrong or irrelevant, but it’s certainly one of them.
He says that “When emissions trading comes in, every tonne of carbon dioxide saved by households will simply free up a tonne that can be used by industry”.
True, but so what? What matters is the total amount of emissions. The total amount is set by the government on scientific/environmental criteria. It matters not one jot who in particular releases the carbon into the atmosphere, and there is no virtue in reducing carbon emissions by more than is needed to combat climate change.
I suppose it remains to be seen whether the CPRS will solve the problems with trust, but remember that the AGO was supposed to take on this role when it was formed a decade ago using Climate Friendly. Any ‘evidence’ that this improved things is inherently counterfactual.
Robert, where we diverge is what should count as ‘evidence’ in the context of appropriate incentives. I reckon there’s plenty of evidence that the economic rationalist approach that dominates public discourse is not just very alienating but creates perverse equity outcomes. You just need to look at the income distribution changes over the past 30 years to see this point.
I’m not interested in getting people motivated to do something because they’ll see the they’ll see it’s ‘good’ in some kind of lovey, moralising sense. I’m interested in getting people to understand that their emissions makes them who they are. Sure it’s possible to measure the social benefits of environmental action: wellbeing, social capital etc. And you can make people aware of the perverse externalities of their actions has to factor into this too. But so long as we maintain a culture of disposability and denial around emissions (it’s just a technical problem), I don’t think we have much hope.
What policies are there beyond the CPRS and labels for plasma screens?
“What policies are there beyond the CPRS and labels for plasma screens?”
The 20% Renewable Energy Target by 2020.
“What policies are there beyond the CPRS and labels for plasma screens?”
MRET, CCS (like it or not), energy efficiency for low-income households (being worked on by Garret), Feed-in tariffs, rebates for solar hot water systems, basix in NSW (and similar in other states), New South Wales Energy Efficiency Scheme (NEET) and similar in other states, etc
And I thought Chairman Clive was off his rocker! Dopey Denniss says:
‘Installing solar hot water systems, driving smaller cars and turning off the lights will not help the environment one bit. The only effect reductions in household energy use will have is to free up pollution permits for the big polluting industries.’
This could be rephrased as:
‘Installing energy efficient production technologies in factories, switching over to gas-turbine electricity generation and shifting freight from road to rail will not help the environment one bit. The only effect reductions in business energy use will have will be to free up pollution permits for households.’
And then, after three-quarters of a page of nonsense, he hits the nail on the head:
‘It would be more accurate to describe the Carbon Pollution Reduction Scheme as the Carbon Pollution Allocation Scheme’.
Exactly. The point of the system is to:
1) Set a cap on total emissions
2) Use prices to provide an incentive to people to reduce their emissions in the most cost-effective way.
It doesn’t matter a jot who reduces their emissions, or what technology they use. One tonne of CO2-e from a factory is no better or worse than 1 tonne from a household. As long as we hit the target, the environmental effect is the same. You can take issue with the cap, but how could you possibly oppose a mechanism that encourages the most cost-effective emissions abatement (unless you’re a rent-seeking windmill manufacturer)?
Oh and dk.au, when you say ‘I’m interested in getting people to understand that their emissions makes them who they are’, you are talking nonsense. I am not defined by CO2 emissions.
Must be using one of those carbon neutral computers… Or do you not define yourself as an anonymous blog reader/commentator?
The 20% Renewable Energy Target by 2020: already talk of dismantling it as “unneeded” once CPRS is in (Garnaut et al).
CCS (like it or not): smoke and mirrors – its PR cover
Energy efficiency for low-income households (being worked on by Garret): What will actually be delivered and by when?
Feed-in tariffs: – gutted by Labor class warfare – net metered and capped array sizes, no national framework.
National solar rebate: – gutted by Labor class warfare
CPRS: High emissions cap, free permits, cash payments = no reductions in emissions until at least 2015, and probably not even then.
Basically, its business as usual for industry.
Never confuse motion with action . . .
You know, dk.au, it’s one thing to say that markets are never perfect (not even the looniest supply-sider believes they are), it’s quite another to say they always fail.
Just what the hell is wrong with using prices to change behaviour? The claim that they won’t change behaviour is palpable nonsense, defying all experience. And if we can achieve the changes needed by getting the right prices then why do we need pork-barrelling grants or illiberal bannings or government enforced re-education?
And given the 20th century’s miserable history, I reckon your willingness to prescribe to people who they are and how they must live is not merely impractical, it is downright sinister.
Required, it is indeed a ‘Carbon Pollution Allocation Scheme’, but it DOES “matter a jot who reduces their emissions”.
One tonne of CO2-e reduced by a factory is not *necessarily* better or worse than 1 tonne reduced by a household – in theory. But that approach ignores who pays for the reduction and the conversion to renewables – and that IS important, especially to low-to-middle-income households.
We need a scheme which reaches the targets in a way which is cost-effective, yes, but which is also equitable. So, while you could rephrase:
‘Installing solar hot water systems, driving smaller cars and turning off the lights will not help the environment one bit. The only effect reductions in household energy use will have is to free up pollution permits for the big polluting industries.’
as:
‘Installing energy efficient production technologies in factories, switching over to gas-turbine electricity generation and shifting freight from road to rail will not help the environment one bit. The only effect reductions in business energy use will have will be to free up pollution permits for households.’
on a simple measure of cost effectiveness and emissions reductions, the measurement remain the same, but the question of who bears the immediate costs differs.
Of course, we then face questions of downstreaming of costs, etc, by companies paying more due to these changes, but that provides an opportunity for government to step in to maintain an equitable distribution of the costs of the transition to a low-carbon economy.
The question is, who really needs the help in the transition: households, or business (thinking especially here of larger polluters, rather than all business, particularly not most small ones).
” it DOES “matter a jot who reduces their emissions”. ”
Not to the environment.
Who bears the cost burden certainly matters, but that is a different question.
According to the CPRS Green paper, the cap on emissions is a hard cap. Assuming that it functions and that there isn’t a cap on the price of the carbon permit, the carbon permit price will be whatever it needs to be so that the cap is on emissions is met.
It is true, then, that if some government undertakes some activity that reduces greenhouse gas emissions, e.g. by installing a generator in a university campus, and the consequent reductions are not reflected in a reduced hard emissions cap, this is really a waste of money on the govt’s behalf in terms of reducing greenhouse gas emissions.
About the impact of price – hmmm – I’m fairly sure that price influences people behaviour all the time.
Q. – “What policies are there beyond the CPRS and labels for plasma screens?”
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A. The 20% Renewable Energy Target by 2020.
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Given that no democratically elected govt expects to still be in power in 2020 why would they care? I don’t think Rudd gets it.
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Price is the key here. I’m resigned to cap n’ trade but I think the better way would be to open up the electricity market – as in abandon the cozy relations between fossil fuel concerns and governments – and tax CO2, raise the price. This will do two things:
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a. Make CO2 use more expensive for everyone.
b. Make sustainable modes of energy production attractive to anyone who wants to pay less for energy.
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I might be wrong of course. I don’t care as long as someone’s right.
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Trouble with the economics debate in political circles is that two sides come from different extremes of preposterousness. On the one hand you’ve got: The Market Will Sort Out Everything.
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On the other: It won’t sort out anything.
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Naturally most politicians are somewhere betwixt these extremes but they do seem to have a little trouble understanding when markets are a good idea and when they’re part of the problem. The latest trend seems to be the worse of both worlds.
The more goofing around on cap and trade and the CPRS I see, the more likely we will repeat the European experience and not reduce emissions.
I think carbon rationing at an individual level is the go. Tangible, equitable and effective.
Just creating a price signal (by cap and trade or carbon tax) is not enough – many wealthy companies and individuals can still choose and afford to produce large amounts of CO2.
Any thought that “market based systems” are effective is surely negated by the recent worldwide dramatic collapse of the market based economic system. And the solution is: Government investment and regulation.
The same applies to achieving a zero carbon emissions future – we need government to impose rationing (regulation) on individuals and industry, and we need government to invest massively in zero emissions energy options – which are available right now.
Unfortunately all Labor seems keen to invest in is ongoing subsidies for Australia’s moribund and lethargic car industry (greenwash & jobs mantra) and the coal industry (clean dirty coal etc.)
Green house gases have been one of the great externalities of our economic system – a classic example of the tragedy of the commons. wherein the pain/loss is suffered by all, not solely by the perpetrator of the damage.
So price mechanisms are good -user pays will have an effect.
However because we are looking at the commons the price signal needs to be high enough to make anthropogenic CO2 and (other green house gases) emissions roughly equivalent to OR LESS THAN the rate of global photosynthesis (plus the yet unproven industrial sequestration of CO2).
So the only way to avoid the ‘floor’ effect is to have increasing prices for CO2 ( increasing taxes or reducing the cap) so that every alternative to burning fossil fuels gets tried first.
Personally I’m really excited by this new era- I think there are very real opportunities for some serious revegetaion and bush regeneration to happen on very broad landscape scales. These projects will also bring other benefits, jobs, improvement in endangered species/community management,salinity, soil conservation, biodiversity, water quality, community building etc…
I’m eyeing off that cleared area along that creek near where you live right now!
Whether or not carbon rationing at the individual level would be desireable, it would be very difficult to implement. It is much simpler to have as few places for accounting for greenhouse gas emissions as possible.
You misunderstand me – I’m not advocating some kind of carbon dictatorship (I’m a social democrat). I’m merely asking that people admit as a first order of business that their identity is a result of the industrial processes that they participate in as consumers and producers. It’s not a tough ask, but it’s a starting point for a discussion about what kind of energy intensity we should aspire to as a society.
I’m not against price as a means of changing behaviour, but the CPRS debate is being conducted completely arse backwards. Abstract economic modelling of long term costs is worse than useless because it detracts from the important questions: who gets to define the risks with technologies and under what conditions?
No, my identity is not “a result of the industrial processes that I participate in as a consumer and producer”.
I’m sorry? 1. what does energy intensity have to do with anything (if you’re interested in carbon emissions, talk about carbon emissions as energy intensity and carbon emissions are not the same); 2. what is this “we should aspire to as a society”? Who is “we”? “aspire to as a society”…. huh? Producing certain goods, such as aluminium, will take more energy than undertaking other activities. Do you want to ordain which activities should be undertaken?
Have whatever energy intensity you wish – but leave the central planning alone please.
dk.au merely asked: “…that people admit as a first order of business that their identity is a result of the industrial processes that they participate in as consumers and producers. It’s not a tough ask, but it’s a starting point for a discussion about what kind of energy intensity we should aspire to as a society.”
No, sorry. My identity is not bound up in my consumption. I’m happy to reduce my CO2 emissions, and have already done so. I want to do more.
Apart from greenhouse effects, I’d like to be responsible for a LOWER environmental impact (there may be other long-term detrimental effects of excess anthropogenic net CO2 emission, e.g. acidification of the upper layers of the oceans; not saying greenhouse isn’t important, just that the global ecology should not be viewed in simplistic, one-variable terms).
I do not see myself primarily as a consumer or producer. The advertising industry might prefer me to see myself that way, but I care not a jot. There are so many facets of human life, human value, creativity, etc. which are quite unrelated to consumption, that I’m surprised you merely asked [as above].
Yes, global warming is an important problem, yes we must reduce greenhouse gas emissions. But let’s not join a race downwards to blinkered over-simplification.
Human ingenuity can be fun. Cheerio.
I always get a bit worried about any sort of economic modelling or forecasting when they start adding in those key assumptions: “Perfect competition and perfect information”. The reality is that in human systems these things NEVER actually exist. Ecomonists need to study more psychology and evolutionary biology to understand why humans really do what they do.
As to ETS – price signals are vital, but they’re not the whole story, and they wont be a complete answer. People tend to respond to price signals very quickly (as in driving less when the price of petrol goes up) but the effect is short term – especially when it comes to using private motor vehicles (and people realize how shitty/non existant the trains are in most Australian cities). Any time the price of an input (such as petrol) increases, there is a short term fall in its use, then a gradual increase to its previous level.
If we want permanent reductions in the usage of greenhouse emitting inputs, we need to understand the human motivating forces driving this kind of behaviour. Economics alone wont give us this, but its a pretty good start.
There seems a ready confidence,here to believe studies or observations of humans will yield results,eventually.I am not so sure,as I am also ,for putting a so called cap on emissions,with the same peculiarities in that I am not sure I can accept climate warming,as a sole perogative of actions to reduce carbon dioxide emissions.Confronted by something missing in what I read often re global warming,I certainly don’t want it left open to decide by academic people or industry.Like yesterday I read at DavidIcke.com,that carbon dioxide has a fixed ratio to the other gases when it comes to the molecular measurement.And in some sort of way,that elemental ratio is impossible to ever change.So, so far carbon dioxide the gas or dust like particles..has dominated my thinking.Not something in ratio molecularly but atmospherically present in a manner it shouldn’t be.I find no struggle in accepting ratios or matters without ratios ,I simple do not to wear guilt.All the exact mathematics of climate change,out of ignorant observation of mathematical precision,seems incongruous in and as representing the phenomena, if it exists.Using Carbon dioxide seems the only reachable realistic goal to achieve.
I always get a bit worried about any sort of economic modelling or forecasting when they start adding in those key assumptions: “Perfect competition and perfect information”
And so would any economist. If economics just assumed perfect markets then the entire field would lose both its intellectual interest and its practical utility. Economic theory, in fact, is largely a study of the way markets can fail. Applied economics is largely a study of the consequences of that failure, and economic policy is mostly about ways to mitigate that failure. It is simply untrue that even free market economists (of which I’m not particularly one) assume perfect markets, and creating this straw man does truth no service.
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People tend to respond to price signals very quickly (as in driving less when the price of petrol goes up) but the effect is short term
Exactly the opposite is true – in the jargon, long run price elasticities are always higher than short term ones. If the price of petrol soars people drive only a little less. If it stays up longer, they buy smaller cars. If it stays up longer still, manufacturers develop more fuel efficient cars. If it stays up longer again, social norms change in response to the economic reality; people expect to travel less and do it more fuel-efficiently.
Spiros, reread my post. I made more or less that point.
More or less.
However, for all the talk about “incentives” and assumptions of “perfect competition” etc, these things (as pre-dawn leftist points out) don’t actually exist. So governments, in creating policies to *actually reduce* GHG emissions will need to construct them in such a way as to ensure that those who bear the immediate cost are able to do so, and whether that is the sector most likely to then lead further reductions.
Equity is more than a nice fluffy “deal with it later” an issue in this process, as big business (and the big polluters in particular) are in a much better position fiscally to bring about reductions in emissions. They are also strategically more important, either because they are some of the largest single polluters (think energy production, aluminium), or they are directly linked to supply-side emissions production.
In the end, too, it DOES matter to the environment, because – in my opinion – we are not going to be able to reduce emissions sufficiently by passing (or allowing to be passed) the cost and responsibility downstream. We need structural change, and the largest, most immobile, most polluting parts of that structure exist upstream (again, think energy production, aluminium, promotion of road over rail in transport and freight).
This is why we are getting wild goose chases like CCS promoted as “solutions”. They minimise the *short-term* cost to business, and dealing with real structural change is put off until later, when (I can assure you) it will be tax-payers who suffer the consequences, and the consequent – and higher – costs of the massive, drastic action required. And by that time, it may indeed be too late.
From the full report :
5. Is there nothing that can be done under the CPRS to reduce emissions below the
government target?
In other words, DCC has to figure out what is more important: following economic theory (just monitor upstream sources) or getting individuals (and businesses under the NGER threshold) involved in the national mitigation effort.
Not an easy choice by any measure.
FWIW, I think Dk.au’s suggestion about “getting people to understand that their emissions makes them who they are” is a really interesting question.
Of course, our emissions do not describe our entire identity, just as much of our activity does not generate CO2 or other ghg. However we are shaped hugely by our birth, or residence, in this wealthy first world country, with lots of land, and lots of coal?
Even things as simple as living in a world with intensively managed sewage systems, and flush toilets, shapes significantly how we view this frequent and fundamental human activity.
Many Australians could well subscribe to the capitalist cartesian, ‘I shop therefore I am’. In fact for many, any tourism (itself a carbon intensive activity) they participate in is framed about what they might be able to buy. NOT buying our way out of trouble may be the hardest, and most fundamental lesson we ever have to learn.
Like harley, I am excited by the possibilities of this ‘new world’, while being cynical of our ability to get there before it’s too late.
Peter C – I think carbon rationing at an individual level is the go.
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You mean like get off your fat arse and walk instead of drive and stop hogging the shower and buy LED lights or something?
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But what about all this great stuff? Emissions permits and carbon credits and the like? Everyone knows that poor old Kevvie’d be lost without making something that’s really pretty simple as complicated as possible.
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Please someone think of the technocrats!
Indeed Adrien. Emissions trading (the CPRS) is like Y2K all over again. A big beat up, shit loads of spend on accounting processes and IT systems, setting up a new trading system (like a mini stock market). Lots of work for technocrats and consultants alike. Another gold rush in fact.
Trouble is, it won’t reduce emissions fast enough, or maybe even not at all. Garnaut’s key recommendations of no free permits and no exemptions for petrol & oil have already been ditched in the CPRS greenpaper – 1 week after Garnaut’s final report. Its stuffed already. I asked at one of the CPRS greenpaper public briefing sessions how they would avoid the European debacle resulting from free permits. They said “of course we will take steps to prevent that happening” – but they didn’t say (and haven’t since) what steps.
I don’t think the government (or the opposition for that matter, even if they joined in a bipartisan approach) are capable of solving climate change and/or reducing carbon emissions. They don’t really represent the Australian people – that is a just a charade trotted out during election campaigns. They represent the big end of town. Money talks. Its a game.
Either our politicians feel some real pain from their electorates and take real action, or we need find another way to deal with this problem.
On the one hand i agree that it ‘doesnt matter a jot’ who does the emission reduction, but two points need to be clarified in light of the comments above
1) It is entirely unlikely that the Government will set a target that is based on science (ie at least 20 per cent by 2020) and far more likely that they will set a target based on the lobbying of the polluters. The main point of the Australia Institute paper was to point out that if the government sets the target too low then NOTHING ELSE MATTERS. we all just shuffle the wrong number of permits around while the earth continues to warm.
2) Equity does matter. Yes i can buy a lot of permits up if i want to, but why should the government issue too many of them in the first place? We have seen with the river Murray what happens when we let the vested interests have a say in setting targets – and the taxpayer is now spending billions buying back ‘propery rights’ that should have never been handed out. We dont have to make the smae mistake with the atmosphere, although it will be profitable for the big polluters if we do
3) Under the proposed CPRS the only way to offset emissions is to buy up permits and rip them up. What we discuss in the paper is creating a secondary market in the audited achievement of efficiency savings. Permits in this ‘efficiency market’, rather than cash, could then be used to effectively rip up permits. Depending on the design this allows people to spend their money on expanding the energy efficiency capital stock (ie install a solar hot water system) rather than spend their money on buying permits off polluters. the benefits of such an appraoch are both greater investment in energy efficiency and, significantly, a lot more enthusiasm on the part of households to act.
Richard (TAI)
Richard: the trouble I have with your philosophical approach is that you seem to think enthusing householders is an end in itself.
From my perspective, that is a means, not an end, and if alternative means are more efficient well and good.
thanks Robert
I dont actually think that enthusing households is an end in itself, in fact, in terms of those who have spent the last decade worrying about cliamte change i think i have been pretty loud and proud about the need to implement good policy and stop worryinng. My sudden interest in voluntary action is based on two related problems:
1) It is increasingly obvious that the government is not going to set an emissions quota for the ETS that is consistent with the scientific foundation of the problem. ie, government action alone means that we will fail
2) To make matters worse, the CPRS in its current design, ACTIVELY PREVENTS households or small businesses from adding to the impact of the half hearted targets in the CPRS. That is, and this is the central point of our paper, under the CPRS any energy efficency savings implemented by households simply frees up additional permits for polluters…the CPRS is better understood as a carbon pollution allocation scheme, not a carbon pollution reduction scheme. There is no need to design the CPRS in such a way that additional household action couldn’t add to the emission reductions rather than just allowing others to increase their pollution.
Tax and trade. Bring it on!
I just want a Carbon Tax figure that is not out there in the air – I want a real figure – I have a business model that will soak up heap and heaps of Carbon and provide a range of other social and environmental benefits but I need a figure to go to my bank with. I can’t create this new triple bottom line business wihout a concrete figure.
I’ve done my homework. BTW at $20 per tonne of CO2 I have a borderline business model with some additional environmental and social benefits – if it hits $30 per tonne CO2 oh I can ramp up those other benefits big time and take this nationwide into heaps of struggling communities and ecosystems. And this model will work even better if the farming sector is brought into the equations rather than the present idea of excluding it.
And that’s a feature, not a bug.
Discouraging people from making high-cost, low-return carbon reduction investments, and encoruaging low-cost, high-return carbon reduction investments, makes us all better off.
I hope you can see how to close to agreeing with each other we are Robert. My frustration with the CPRS is solely a function of the likelihood that the target will be set without reference to the science of the problem.
To be clear, if the target was about right, i would not be at all concerned about the fact that voluntary abatement just substituted for othr action. But if the target is set too low, and voluntary action does not add to emission abatement, we are literally locking ourselves into failure.
richard – even if the scheme that you suggest was introduced, what would stop the government lowering the targets such that we’re back in the same place? Isn’t the government choosing the targets with a specific impact on industry in mind?
Chris: thanks for the clarification, and we are indeed close to agreement.
I suppose I just think that acting as an individual on moral grounds, while appropriate (I buy green power, ride to work, and buy high-quality offsets when I take plane flights), simply won’t make a significant dent in the problem.
Let’s see what the government produces…
We need to avoid false dichotomies.
It is perfectly valid and necessary for individuals to do everything within their desire and span of control to reduce carbon emissions.
The same applies to governments – state and federal, and industry. The problem with the CPRS is that it won’t reduce emissions as far as I can tell earlier than 2015, maybe not even then. So we need low targets (cap), on free permits and no exemptions or tax offets (e.g fuel rebate).
Or we need another approach entirely – truly based on science, free from political interference and industry influence
Robert, I suppose where we disagree is that people never do just ‘act as individuals on moral grounds’. Social scientists have long argued – and marketers long understood – that social life is understood comparatively. Without reference to peers, you can’t live ‘normally’. This is not just a point of abstract theory (structure v. agency etc), but has very real consequences for the kinds of calculation that economic policy makers see as being possible and desirable.
The irony for me is that economists are always keen to discuss negative externalities in the most dry, abstract, objective language as possible. But as soon the discussion switches to the benefits of innovation they’re straight up to the pulpit, arms waving.
dk, I really don’t understand what you mean. Robert’s comments make a whole lot of sense to me.