So GetUp has raised $93 000 in just 24 hours to get the Spot the Difference ad1 on the air during the boxing day test, suggesting the discontent over the target announcement will crystallise into a significant force during the new year.
The only certainty that has emerged from this week is that by treating this as politics and policy as usual, Rudd has been utterly foolish. Anna Rose has an excellent summary of the scheme design itself. Anybody who thinks it should pass the Senate in its current shape is either being paid to say that, living in an unreality so loopy that I’ll drop out and have what they’re having dude, or never thought we would be able to get organised in time to do anything about the problem. And to the latter, I say screw you emo. Go home and listen to some whinging depressed crooner and let the adults get on with it. For the purposes of this post I’ll leave aside the question of whether, according to some deft Machiavellian logic it’s in Australia’s long term interests to have a scheme so riddled with loopholes, striving for such a pathetic target as to render it worthless in driving appropriate investment and behavioural change.
The Kyoto Protocol ratifying, Stolen Generation Apologising (don’t hear much about Teh Intervention these days, do we?), 2020 Summiting Kevin07 is a very distant memory now. We were expecting a fiscally conservative Kevin08, but this has translated into a blinkered and tawdry managerialism.
The White Paper epitomises this mentality, not just in substance, but in process. Consider, for example:
1) The release of the 800+ page, impenetrable tome of bureaucratese 10 days before Xmas
2) $130m in greenwash funding to advertise it during the silly season
3) The top down, lack of substantive public consultation outside ‘the submissions’.
This whole process is a damning indictment on the Canbureaucracy’s role in the praxis of government in our efforts to come to terms with the problem over the past 20 years – when the director of Toronto Conference declared “The time to act on these problems is now”. Few will remember the National Greenhouse Response of the Hawke era, the valuable discussion papers that emerged from the Australian Greenhouse Office in the late 1990s and numerous interventions at the state level. Of course, all of these hugely expensive processes are quickly forgotten by the myopic public sphere as we wait for CCS, a China+America deal, the end of the commodity boom, the end of the slowdown, Godot or whatever else the lobbyists, shills and emos pick as flavour of the month.
The political Realists in both the Green and Denialist/Emo camps have been focusing on the most obvious processes of politics: questions like ‘will it get through the Senate?’ ‘How much danger are Turnbull, Albo, Tanner and Plibersek in of losing their seat?’ But I think these sort of questions miss the real question of politics here, which is why the government is ostensibly driving for a single carbon price as the centrepiece of its policy at all?
The carbon price really is front and centre of the Canbureau’s response, with expanded Renewables Target and CCS bringing up the rear (excellent topics for later discussion). I took up the question of voluntary response and a secondary market with Blair Comley at the White Paper information session in Sydney on Wednesday. His response was basically: it’s more efficient for us to have a single carbon price. Now I understand the basic economic theory: allocate property rights, create the market structure with appopriate legislation = drive more abatement for less cost. But behind these are epistemological, sociological and essentially political questions about who has the resources, time and expertise to certify that, for example, soil carbon, fugitive emissions for coal mining, forestry plantations, brown coal burnt for power2
Loy Yang pit mine, Latrobe Valley, Vic. Photo credit: author’s own.
If the CPRS is a failure of governance, these processes behind building a form of equilibrium through a carbon price within the polity should be thought of as front and centre to politics rather than at the peripheries or simply a matter for scientists. Our experience with voluntary carbon markets to date should be instructive to policy makers on two fronts: firstly, concentrating on the supply side, the market for emissions reductions (at least when working according to textbooks) renders the uncertainties about the authenticity or permanence of the reductions as ‘risks’ and prices them accordingly. On the demand side, projects are valued by buyers according to very specific marketing criteria. What kind of story does this project tell? How can this story relate to my brand?
Bracketing out these questions of values and evaluation of the socio-technical nature of ‘emissions reductions’ from the regulatory market design process is setting it up for failure. Because in many ways, the White Paper represents the apotheosis of Neoliberal theory at a time when everyone is beginning to once again feel thoroughly alienated from claims that the ‘Free Market’ will liberate us. Witness in the White Paper:
- The rejection of any secondary market for voluntary emissions reductions because it would be ‘inefficient’. True in theory, but why not establish mechanisms to actually drive behavioural change explicitly? The price signal will be far too weak for this.
- The weird international linkages based on the assumption that if we throw our weight behind the CDM process it will somehow become less dodgy. The sheer idiocy of market-like (project based) mechanisms providing any kind of efficient transfer without clearly delinated and enforceable property rights should be a cause for considerable concern
- The horrendously inequitable EITE clauses effectively creating two carbon prices: Anyone who support this in its current uncapped form either has rocks in their head, is a mouthpiece of industry or too emo to take seriously. This creates a basket case culture of industry handouts which may prove extremely difficult to remove the trainer wheels from. Their carbon price is effectively zero because, with banking and borrowing clauses, they’ll be able to hedge their position effectively with the hope of getting a more sympathetic ear in Canberra down the track, deferring any effective decision-making.
- Provisions to keep coal fired power running under the auspices of ’supply security’. What was wrong with Garnaut’s proposal to provide structural adjustment assistance to the effected communities? This is market fundamentalism in the form of the National Electricity Market whose sole, perverse efficiency is providing Kilowatt hours of power instead of what people actually need: energy services
This dialectic between the unleashing of market forces and the horror at their divisive social effects is the story of the Great Transformation; and I suspect the response to the White Paper we’re seeing unfold will demonstrate its explanatory power in much the same way as the EU ETS Phase I caused great cynicism amongst the population there. The difference is that we’ve allocated property rights but not backed them up with effective governance arrangements. They are treating emissions trading as a rolling series of experiments from which social and institutional learning should feed into each phase of the scheme design, we’re treating it as a problem with essentially a techno-economic fix. Any market will have winners or losers that emerge according to the rules written into its function.
So who are the winners and losers in the current proposal:
Winners:
- The biggest winners are industry that gets over the line to qualify for EITE assistance, or has cooked their books sufficiently to get them there. Movements in commodity or currency prices will see them have a field day, generating permits for deviations from a historical baseline intended to drive change but simply creates a whole new raft of uncertainties
- The big financiers and traders. We’re establishing a market, remember. ‘nuf said
- Consultants. The f*ckin’ thing is 800+ pages of, often impenetrable bureaucratese.
Corresponding Losers:
- Those suckers (us) who have to pay for their permits one way or another
- The 900 odd medium sized firms who scraped into the NGER threshold but don’t qualify for EITE. Prepare to get taken to the cleaners by the big end of town, boys
- Generalists/the public writ large/future generations. This is where the whole thing comes full circle and the challenge is to find avenues of engagement where people can link their actions to effective technological changes.
So far, these avenues appear to be (a) basically to buy permits through some kind of intermediary exchange (linked to solar panel purchase, for example) only if they will retire or bank without using official permits. This will push the permit price up, creating scarcity etc. Just pray we don’t hit the domestic price cap too quickly [edit: I should emphasise that I fully support community projects like putting solar on the surf club etc., but it must somehow incorporate the retirement of permits to be additional] (b) a bloody coup with the emergent carbon elites first against the wall (c) if you’re feeling adventurous, this kind of thing (d) exerting an unprecedented level of civil pressure on sitting members to reform this thing before it’s legislated.
Elsewhere: Guy Beres on Mr 5%, John Quiggin on PPPs, Deltoid: as long as we beat New Zealand.
- These interviews and this ad make for interesting viewing a year on [back]
- interesting aside – until very recently Loy Yang had no idea how much its emissions were – it just dug, shipped and burned [back]
I’m about to be a little off-topic, but the deniers seem to have been dealt another blow, with new research indicating (again) that (as the headline says:
Further:
“I’m about to be a little off-topic”
That’s the last thing a blogger wants to read opening the first comment!
He’s being called Kevin05 around here.
Top post, dk!
Cheers, Mark. I hope it makes sense…
I should mention that anyone planning to change to Green Power for the sake of purely reducing Australia’s emissions should do their research very carefully. The Carbon Pollution Allocation Scheme should mean it only changes the energy mix, which is itself a good thing from my perspective.
“Kevin05 around here”: I’m finding “Carbon Coward(s)” works.
Sorry, dk.au – delete/move the comment if you think it doesn’t belong. I think it’s a great post. I’m a little depressed as to how quickly the whole thing devolved into the politics of seat losses/wins (and I’m a Green). I’d have preferred a decent plan, properly argued and implemented, to the possibility of more seats for my party of choice.
None of your four choices are satisfactory, but I don’t see any alternatives.
Just followed your
link: Was it a bomb, Was it a missile… no it was Climate-Man…, more leisurely than a strolling bushwalker, more brazen than a greenpeace inflateable, shuts off power stations with a single flick,…
Way to go, Climate-Man!!
After Alister’s just apologised for going off topic, Danny, it might be better to stick to the actual topic and take that stuff to another thread!
I’m afraid my long-held belief in non-violence is having severe difficulty in holding me back from embracing this one…. That sinking feeling I had all the way through High & Dry returns every time I contemplate the $3.9bn pa going to the Rio Tintos, et al.
As for option d, the one I know I should be taking instead, I struggle to think of the messages that would cut through sufficiently to Joe Public to kick off the extent of MP harrassment required.
Common sense would suggest that ‘do you realise you’re paying for these corporate bonuses?’ should work. I could even imagine Graham Morris nodding to this one when he considers the power of the ‘I’ve been done over’ feeling in the average punter.
But without access to $squillon/hour Canberra lobbyists, I’m genuinely struggling with my impotence as a humble citizen in the face of the stupidity & cynicism of the CPRS.
I’m prepared to work as hard as is necessary to shift public opinion on this but I wonder how on earth can we actually do it.
One possibility was sent to me by a friend –
but I’d say the leftist rant that contained this single moment of wisdom was probably angling more for option b.
I should emphasise that I fully building support community capacity locally (putting solar panels on your surf/cricket club house, etc.) but it has to include a bit of (a) to the extent that people want their efforts recognised nationally and internationally because that’s effectively how these mechanisms have been established. I wasn’t meaning to sound snarky and thanks for the link but the post is, in some ways, the culmination of my immersion in the issue this year.
You know I just realised that despite reading about the ETS a lot, I have no idea how they will actually be measuring the amount of emissions a company pumps into the atmosphere.
Will it be self-reporting or will it be done by an independent authority? Or has nothing actually been said about this.
Anyone care to enlighten me?
Very good question, Oz.
I believe it’s self reported and audited by a third party. We have a National Measurement Institute whose Director wrote a scathing submission to the Green Paper (I believe it was) on the scant measurement guidelines. I’m not sure whether they’ve been addressed in the White Paper – i’ve been looking at the other issues.
This is from section 7 of the green paper:
“The Green Paper noted that emissions monitoring and estimation can take several forms, from the use of observable activity data to estimate emissions, to site-specific sampling, through to direct measurement of emissions. The classes of methodologies available for use under NGERS are set out in the box below.”
“Large emitters (those with obligations under the Scheme for greenhouse gas emissions of 125,000 tonnes of carbon dioxide equivalent or more) will be required to have their annual emissions reports audited by an independent third party before submitting them to the Scheme regulator. The Government will consider the need to extend this requirement on the basis of initial experience, developments relating to international linking and the compliance burdens on small entities.
The Scheme regulator will conduct, or require the appointment of external auditors to conduct, external audits using either a risk management approach or on suspicion of non-compliance.”
By the way, I can understand some of your frustrations with the scheme, but the need to spell out, inter alia, clearly the reporting and auditing requirements, tax treatment, governance, etc, is the key reason why it is 800 pages long – it is the basis for legislation for hecks sake. An ETS is a very complicated regulation. To make any regulation that complex work effectively (whether you agree with the design principles themsleves or not) requires being prepared for as many contingencies as possible.
If you wanted something a lot simpler, you could have advocated a carbon tax. That is pretty straightforward – all you need then is a reporting/monitoring/auditing regime to support it. Compensation, if any, could be kept simple by cutting the overall corporate tax rate (which would benefit all incorporated firms), not just large emitters, and income support measures for low income households. Remaining revenue would be recycled into R&D measures.
“So far, these avenues appear to be (a) basically to buy permits through some kind of intermediary exchange (linked to solar panel purchase, for example) only if they will retire or bank without using official permits. This will push the permit price up, creating scarcity etc. Just pray we don’t hit the domestic price cap too quickly [edit: I should emphasise that I fully support community projects like putting solar on the surf club etc., but it must somehow incorporate the retirement of permits to be additional] (b) a bloody coup with the emergent carbon elites first against the wall (c) if you’re feeling adventurous, this kind of thing (d) exerting an unprecedented level of civil pressure on sitting members to reform this thing before it’s legislated.”
If this is your set of options, then I guess you are saying you don’t hold out much hope. The price cap is sufficiently low, that any attempt to do a) on a large scale would quickly raise the permit price to the cap – at which point firms can purchase permits in unlimited quantities. So, all you will get is the amount of abatement consistent with a carbon price of $40/t.
dk.au, Greens tend to support decentralised power generation, and I’m no different. So I like the idea of (a). But it’s really hard to co-ordinate. This is, after all, the sorts of things that we have governments to co-ordinate for us. It’s why we elect them. It doesn’t have to be the Feds either (I’m all plugs, all the time, it seems – sorry [again]). I think we’re basically stuffed at the moment, with (d) being the only option in the longer term. Labor’s going to have to lose seats. Except that Labor’s likely to be better than the Coalition anyway, so why, if AGW was your primary concern, would you switch to the Libs? There’s one seat that Labor could lose on climate change on current figures (Melbourne Ports may be a bridge too far, and Sydney and Grayndler would be tough asks). Unless things change in a big way, we’re stuck with 5%, and I think there’s general agreement that that’s inadequate. The only thing that could change our target is beyond our power. We need a good, solid international agreement, and/or China, India and the US to show more sense than we’re doing at the moment.
But the backlash we’re seeing now is, to no small degree, against this very process. I have a lot of sympathy for your view (as I’ve read it so far on your comments here) that there is a measured calculus behind all this. But the whole point of outlining this as a failure of governance, rather than government, is to emphasise the contradictions between its processual, ‘event’-ness (climate change needs addressing now) and the inertia and path dependence (behind the Canberra bureaucracy, the theory of emissions trading going back to Coase, and the idea of property rights as the surplus value of one’s exploitation of nature before it spoils according to Locke).
These are extraordinarily deep and difficult processes – which Garnaut quite rightly called diabolical. But, like you, I’m trying to draw attention to the fact that Rudd has just ticked this box as another policy issue – if you watch that Marie Claire interview closely it’s hugely instructive. There’s really no enthusiasm in his eye to engage with this issue substantively. He talks about low wattage lighting and green power but can’t even remember those terms. This is where I believe the term ‘tawdry managerialism’ is entirely apposite.
Unfortunately we’ve been locked into this process of emissions trading for a whole lot of reasons to do with the influence of economic thinking on the political process over the past half century that I feel will be extraordinarily difficult to overcome. If you and I can make people see the elegant efficiency of the carbon tax over this astonishingly cynical private taxation regime for ‘EITEs’ then hurrah to us. Who do we lobby first?
And by the way, you are dreaming if you think that GetUp ad will be effective. I thought the new-left was all about being positive? Can’t you sell your argument in a more positive way than attacking Rudd a supposed similarity to Howard? Over the next few months the coalition will do a great job of giving the electorate the impression that the the government have gone too far. And besides, even just prior to losing the election, Howard’s satisfaction rating (according to Newspoll) was higher than his dissatisfaction rating, even in marginal electorates. You will need to do a lot better than that if you want opposition to the targets to “crystalise into an effective political force”.
Hi DK
I posted my last response before I had read you at #16. Just to explain that a bit further, what I would have liked to see in that add a greater appeal to the moral/ethical issues at stake. Presumably if GetUp really wants the public to look at these issues through a different lens than has been the case in the past, it should use something other than traditional political tactics?
On the substance of your post at #16, I gave up on Rudd being something other than managerialist some time ago. It is in his DNA. In fact, he is the perfect PM for the upper echelons of the Canberra bureaucracy. When you saw him interviewed in the lead-up to the election, did you see real engagement in his eyes when he discussed climate change? I didn’t. It was something to be to be managed (largely by other people) while he concentrated on the things that were of more interest to him.
There is of course an irony to the association of the ETS with economic thinking. Yes, the option of trading permits as a way of overcoming an externality has its origins within the profession. But in my experience the drive to the ETS has not been by economists. The majority that I work with favour a carbon tax for the very reasons we have discussed. Indeed, Greg Mankiw, whom I know is not much loved on this blog, has started up a Pigou Club, ostensibly to push the idea that carbon taxes can be efficency enhancing if used to offset other less efficient taxes. In my view, the coalition around emissions trading has come about because it suited two groups – environmentalists that wanted a quantity constraint – and business lobbyists because they knew it would be easier to game than a carbon tax. In anothe irony, the Europeans were initally opposed to emissions trading but were persuaded to do a deal with the US in the Kyoto negotiations. Unfortunately for the environmental movement, they got sold on the ETS on the basis of what it could be,not what it was likely to be….and got screwed in the process…
I fear that it is too late to lobby otherwise…the only thing left to do now is to begin a long, probably unsatisfying campaign for reform….
I’m also not convinced that the political tack the GetUp! campaign is taking is the right one.
Actually, I thought he seemed most genuinely excited when he was talking about governance and public service reform! I seem to remember saying at the time this was significant – those of us who knew Ruddy in Queensland Labor and the Queensland public sector aren’t surprised.
I would be interested to learn how frequently emissions’ reports will be conducted. Will continuous monitoring for carbon based chemical emissions become mandatory?
Will scrubbers and other pollutant prevention controls become mandatory for stack emissions? Currently many large emitters are only required to have stack emissions analysed every three months – some as little as every twelve months. Smaller operators’ emissions are often greater than large emitters – particularly those who are using untested waste oil as a fuel (not a good way to “recycle” hazardous waste eh?) whose operations are permitted to function with poor combustion technologies.
Some chemicals are not tested at all. Analytical testing is usually performed by NATA accredited laboratories. I’m reminded that when I invite guests to dinner – perhaps every three months too, I go to great lengths to clean the house for my visitors, though often in between dinners, the state of my house could be deemed hazardous!
Therefore, if continuous monitoring is not made mandatory and departments of environment maintain the status quo – that is, the occasional monitoring of ambient air (ground level) for stack emissions, then the ETS will merely be yet another joke – similar to the farcical regulations which have been occurring in this nation for decades and which are responsible for the pitiful state of Australia’s environment and the deplorable condition of its failing ecosystems and in some cases, the potential, total collapse of some, which could be imminent.
Perhaps my questions are too trivial after all, as I have been chastised before “It’s the economy stupid.”
Ok I just noticed there’s another guy called “Oz” here and I think they’ve been here longer.
Just want to point out I was trying to be/undermine and I have no relation to them.
Emily – see section 7.3 of the White Paper for how emissions are to be monitored.
Thanks so much for the link mitchell porter. As a result of your advice, I have accessed the paper and am currently endeavouring to digest the contents of section 7.3. Cheers.
The National Electricity Market is a wholesale market for electricity. Electricity retailers buy electricity in bulk from the National Electricity Market and then onsell it to people and organisations. The wholesale market is designed to attempt to meet the demand for electricity in each five minute period at the lowest possible monetary cost by determining how much electricity each generator should produce in each five minutes to meet the overall demand at least cost.
I don’t think that the add will be effective. Most people don’t respond well to ridiculing of people (in this case John Howard) in this way. I believe that people who already believe the ad’s message will like it, but hardly anyone else. GetUp surely could’ve created a better and more effective ad than this.
Just to pick up a few points:
I was citing the huge fund raising behind the GetUp ad (now quickly approaching the $160 000 it would take to get it blanket media coverage) to point out massive discontent over the target and the package behind it. I withheld comment about the content of the ad itself. Strategically, I think it’s much more important to awaken people to the political realities of the CPRS as it stands than put forward some kind of nuanced ethical engagement with the issue. People will seek that out when they realise what’s happened.
Though one strategy I think could work would be to illustrate the mismatch between the ‘assistance’ and the nominal principles of a Labor Government (at least in the olden days). I entirely agree that anyone who thought Kevin Rudd was going to be some kind of Climate Change Messiah really should have been paying attention to his rhetoric. But really, WTF are they doing pissing money onto the balance sheets of multinationals???
Maybe not professional economist wonks, but the fundamentalist faith in market efficiency is certainly a product of economic thought and provides the common ground for liberal enviro types and traders.